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Is There An Opportunity With Delphi Technologies PLC's (NYSE:DLPH) 34% Undervaluation?
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In this article we are going to estimate the intrinsic value of Delphi Technologies PLC (NYSE:DLPH) by taking the foreast future cash flows of the company and discounting them back to today's value. This is done using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
Check out our latest analysis for Delphi Technologies
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF ($, Millions)", "2019": "$20.58", "2020": "$178.10", "2021": "$233.00", "2022": "$290.00", "2023": "$336.65", "2024": "$377.32", "2025": "$412.32", "2026": "$442.46", "2027": "$468.73", "2028": "$492.05"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x5", "2020": "Analyst x7", "2021": "Analyst x2", "2022": "Analyst x1", "2023": "Est @ 16.09%", "2024": "Est @ 12.08%", "2025": "Est @ 9.28%", "2026": "Est @ 7.31%", "2027": "Est @ 5.94%", "2028": "Est @ 4.97%"}, {"": "Present Value ($, Millions) Discounted @ 14.68%", "2019": "$17.95", "2020": "$135.43", "2021": "$154.50", "2022": "$167.68", "2023": "$169.74", "2024": "$165.90", "2025": "$158.08", "2026": "$147.93", "2027": "$136.66", "2028": "$125.09"}]
Present Value of 10-year Cash Flow (PVCF)= $1.38b
"Est" = FCF growth rate estimated by Simply Wall St
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 2.7%. We discount the terminal cash flows to today's value at a cost of equity of 14.7%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$492m × (1 + 2.7%) ÷ (14.7% – 2.7%) = US$4.2b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$4.2b ÷ ( 1 + 14.7%)10= $1.08b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is $2.45b. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of $27.91. Compared to the current share price of $18.55, the company appears quite good value at a 34% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Delphi Technologies as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 14.7%, which is based on a levered beta of 1.797. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Although the valuation of a company is important, it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Delphi Technologies, I've compiled three important factors you should further research:
1. Financial Health: Does DLPH have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does DLPH's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of DLPH? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Wayfair Workers Walk Out Over Business With Migrant Detention Center
Hundreds of outraged Wayfair employees at the company’s Boston headquarters walked off the job Wednesday to protest the online retailer’s business with a contractor that operates migrant detention centers. Workers learned last week that the furniture outlet sold $200,000 worth of bedroom furniture to a government contractor called BCFS for the purpose of outfitting an immigrant detention facility in Carrizo Springs, Texas, reportedly capable of detaining 1,600 migrant children. Employees greeted the news by sending a letter to Wayfair’s leadership team, urging the company to desist from “enabling, supporting, or profiting” from “the detention and mistreatment of hundreds of thousands of migrants seeking asylum in our country.” For the record, here’s the letter the employees sent, which includes the details of the B2B order that wayfair fulfilled. pic.twitter.com/mfKs1krawu — Dais (@sun_daiz) June 25, 2019 “Knowing what’s going on at the southern border and knowing that Wayfair has the potential to profit from it is pretty scary,” Elizabeth Good, a Wayfair manager who helped organize the protest, told the Boston Globe on Tuesday . “I want to work at a company where the standards we hold ourselves to are the same standards that we hold our customers and our partners to,” she said. Filled Copley Square at @Wayfair protest #WayfairWalkout pic.twitter.com/v5ayCXMnl8 — Janet Wu (@JanetWuNews) June 26, 2019 In a bid to mollify employees, Wayfair is reportedly donating profits from the sale to charity. A request for comment from the company seeking a specific charity and dollar amount was not immediately returned. Story continues Per walkout organizers, it will be a $100,000 donation to the Red Cross, which they note “has nothing to do with these ICE-operated facilities.” “This is an injustice and we’re going to do something about it,” @Wayfair employee Tom Brown shouts. @NBC10Boston @necn pic.twitter.com/2uHTyMXeET — Abbey Niezgoda NBC10 Boston (@AbbeyNBCBoston) June 26, 2019 “We are not against beds, we are against profiting off the detention of children,” an unverified Twitter account claiming to represent the workers wrote. “A prison with a bed is still a prison.” Love HuffPost? Become a founding member of HuffPost Plus today. Political figures including Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.) have also voiced their support for the protest. Wayfair executives responded with a letter of their own, thanking employees for “expressing [their] thoughts and opinions,” and informing them the company would nevertheless continue to do business with “any customer who is acting within the laws of the countries within which we operate.” A copy of the response soon found its way to Twitter: I know I only have like 12 followers but look at this fucking shit. @Wayfair is supplying the concentration camps and their employees are pissed about it. @davidhogg111 you’re good at this shit. pic.twitter.com/zaed6gSVe6 — the braves bullpen of takes (@FizFashizzle) June 25, 2019 Related Coverage Migrant Children Describe Neglect, Mistreatment At Texas Border Facility Utah Newspaper Says U.S. Is Running 'Concentration Camps For Refugee Children' At Least 4,500 Migrant Children Claim Abuse At U.S. Government-Funded Shelters Wayfair Employees To Protest Company's Business With Migrant Border Camps Officials Reveal Previously Unreported Migrant Child Death In U.S. Custody From 2018 Trump Claims Administration Doing 'Fantastic Job' Housing Migrant Kids At Border This article originally appeared on HuffPost . |
2019 FIFA Women's World Cup: What’s happened to Alex Morgan?
PARIS — Alex Morgan scored five times against Thailand in the Women’s World Cup opener for the United States. She hasn’t scored since. She sat and rested in a victory over Chile. Against Sweden, she missed the second half after a heavy on-field collision. Morgan said she recovered to full health, but in Monday’s round of 16 victory over Spain, she found herself a target as the Spanish defense seemed to make a point of playing her physically. She was repeatedly knocked to the ground, and by game’s end, a spent Morgan was subbed out for Carli Lloyd. Officially, she suffered five fouls against her, although she later estimated it would have been more than 10 if the referee had whistled them all. “Reckless,” Morgan described it. While the U.S. won 2-1, it neither scored nor got an official shot on net outside of two penalty kicks . It was not the performance it wanted collectively, or Morgan wanted individually. “As a forward, you always want to score in run-of-play,” she said. And it’s probably not the performance that can get the team past fellow powerhouse France on Friday (3 p.m. ET) in a game pitting the world’s two highest-ranked teams. Is Morgan hurt? And even if she is, does it matter? Alex Morgan says she is healthy. (Photo by John Walton/EMPICS/PA Images via Getty Images) “No, I’m feeling good,” Morgan said. “I got a knock [in the Sweden] game, but luckily I recovered. Maybe the Spain players saw that and wanted to, kind of, be a little more aggressive with me ... “I think that they designed to be more aggressive, which they showed. We got a lot of free kicks out of it, we could’ve capitalized on it more than we did. But at the end of the day, it showed just the physicality.” Well, if Spain was physical then France promises to take it to the next level. This is especially true if there is a belief that Morgan is at all fragile at the moment. Her speed and finishing ability makes her extremely dangerous. But you can’t run while laying on the ground. The French backline is powered by Wendie Renard and Griedge Mbock Bathy, two of the most imposing players in the world. Renard stands a towering 6-foot-2, the tallest player in the World Cup, and has proven herself capable of shutting down opposing attacks. Story continues The 5-foot-7 Morgan hasn’t scored against the French in three games, dating to 2016. The United States has two losses and a draw against France during that span. “They are a challenging opponent and they are always going to show up for big games,” Morgan said. This is certainly a big one. Many believe whichever team advances Friday will win the World Cup. The FIFA pingpong-ball draw set up a de facto finals early. The U.S. can win without Alex Morgan scoring goals, but it certainly would be a lot easier if she were filling the net. She’s the best scorer on the team, a clutch presence and someone defenses have to key on. She also walks onto the field with plenty of confidence. Yes, France is good, but she certainly isn’t running scared. “They’ve struggled at times [in the World Cup],” Morgan said of France. “And we are going to have to look at that and pick apart the weaknesses.” Morgan became a star based on her big-game heroics, with a knack for scoring late, critical goals. Just weeks after her 22nd birthday, she recorded a goal and an assist in the 2011 World Cup final, a loss to Japan but a performance that announced her to the world. The Americans’ 2015 World Cup title, however, came mostly without her — she missed time with injuries and Lloyd became a hero. At 29, this is Morgan’s World Cup and this is her team. She has shown no hint of quit in her. She may have been hobbled and bruised against Spain, but she didn’t want to come out of the game. And while she didn’t score, she grabbed the ball and was prepared to take the second penalty kick that proved decisive. It wasn’t until the U.S. coaching staff ordered Megan Rapinoe to take it that she conceded. “It’s ultimately the coaches’ decision,” Morgan noted, clearly wishing she had been able to shoot despite being pleased with Rapinoe’s success. “So the ball went back to Rapinoe. I’m happy taking it.” Now she’ll have to shake off whatever battle scars she’s acquired during this World Cup and face off against the most physically imposing defense in the field. It won’t be easy. It isn’t supposed to be. More from Yahoo Sports: Rapinoe: ‘I’m not going to the f---ing White House’ Machado feels the love in his return to Baltimore Iggy says Warriors called fractured leg a ‘bruise’ Women’s World Cup is succeeding, no thanks to FIFA |
Is Superior Plus Corp. (TSE:SPB) A Financially Sound Company?
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Investors are always looking for growth in small-cap stocks like Superior Plus Corp. (TSE:SPB), with a market cap of CA$2.3b. However, an important fact which most ignore is: how financially healthy is the business? Assessing first and foremost the financial health is essential, as mismanagement of capital can lead to bankruptcies, which occur at a higher rate for small-caps. The following basic checks can help you get a picture of the company's balance sheet strength. Nevertheless, this is not a comprehensive overview, so I recommend youdig deeper yourself into SPB here.
SPB has built up its total debt levels in the last twelve months, from CA$1.0b to CA$1.9b , which includes long-term debt. With this rise in debt, the current cash and short-term investment levels stands at CA$23m , ready to be used for running the business. On top of this, SPB has generated cash from operations of CA$315m during the same period of time, resulting in an operating cash to total debt ratio of 16%, signalling that SPB’s current level of operating cash is not high enough to cover debt.
With current liabilities at CA$425m, it appears that the company has been able to meet these obligations given the level of current assets of CA$567m, with a current ratio of 1.33x. The current ratio is calculated by dividing current assets by current liabilities. For Gas Utilities companies, this ratio is within a sensible range as there's enough of a cash buffer without holding too much capital in low return investments.
SPB is a highly-leveraged company with debt exceeding equity by over 100%. This is somewhat unusual for small-caps companies, since lenders are often hesitant to provide attractive interest rates to less-established businesses. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In SPB's case, the ratio of 2.64x suggests that interest is not strongly covered, which means that debtors may be less inclined to loan the company more money, reducing its headroom for growth through debt.
SPB’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. Since there is also no concerns around SPB's liquidity needs, this may be its optimal capital structure for the time being. This is only a rough assessment of financial health, and I'm sure SPB has company-specific issues impacting its capital structure decisions. I recommend you continue to research Superior Plus to get a more holistic view of the small-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SPB’s future growth? Take a look at ourfree research report of analyst consensusfor SPB’s outlook.
2. Valuation: What is SPB worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether SPB is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Supreme Court strikes down Tennessee liquor sales law
WASHINGTON (AP) The Supreme Court on Wednesday struck down a Tennessee law that makes it hard for outsiders to break into the state's liquor sales market. The court voted 7-2 in ruling that a state requirement that someone live in Tennessee for two years to be eligible for a license to sell liquor violates the Constitution. The outcome was a victory for a family that moved to Tennessee because of their daughter's disability and a national chain with nearly 200 liquor stores in 23 states. The case pitted the authority given to states to regulate alcohol sales in the 21st Amendment that repealed Prohibition in the United States against the constitutional principle that only Congress, not the states, can regulate interstate commerce. Justice Samuel Alito wrote in his opinion for the court that states have considerable power to regulate the sale of alcohol, but they can't discriminate against out-of-state interests. The predominant effect of the residency requirement is to protect Tennessee liquor sellers "from out-of-state competition," he wrote. In dissent with Justice Clarence Thomas, Justice Neil Gorsuch wrote that the 21st Amendment left the regulation of alcohol to the states. The case began when the Tennessee Wine and Spirits Retailers Association opposed the issuance of licenses to Doug and Mary Ketchum, who moved to Tennessee from Utah, and the national chain Total Wine Spirits Beer & More for a store in Knoxville, Tennessee. The Ketchums operate Kimbrough Wines & Spirits in Memphis. Their 34-year-old daughter, Stacie, has cerebral palsy and suffered serious respiratory problems in Utah. "This has been three years of nail-biting, waiting for this final opinion. This decision now means no more looking over our shoulder and worrying if they're going to take away our license," Doug Ketchum said in a statement provided by the Institute for Justice, which represented the family at the Supreme Court. Story continues There were two provisions in play initially, two years of residency before obtaining a license and 10 years in Tennessee before a liquor license can be renewed. Both residency provisions were struck down by lower courts, and the retailers' association dropped its defense of the longer requirement. The retailers argued that having people in the state for two years made it easier for authorities to do background checks and seize a liquor seller's financial assets if necessary. Thirty-five states and the District of Columbia backed the retailers' association, but Tennessee itself had essentially stopped defending the residency requirements. Arguments in the case took place in January on the 100th anniversary of ratification of Prohibition, the constitutional ban on the manufacture and sale of alcohol in the United States. Prohibition ended in 1933. The case is Tennessee Wine and Spirits Retailers Association v. Thomas, 18-96. |
5 Odd but Effective Ways to Keep Cool Without A/C
Except for one glorious summer of apartment dwelling, I’ve never lived anyplace with a central air system. I didn’t even have a window air-conditioning unit until after I was married.
I spent my childhood summers sweltering. The downstairs windows of our home didn’t open, and my second-story bedroom was cooled by one small fan.
In fact, I remember sneaking down to the freezer at night for ice cubes to run across my forehead in hopes I would cool off enough to fall asleep.
The heat can make you resort to all sorts of tactics to keep cool. If you’re feeling desperate for relief, try one of these sometimes strange — but effective — methods:
The fastest way to start shivering in 90-degree heat may be to dip your toes into freezing cold water. Fill a bowl with cool water, and dip your little piggies right in.
Add some ice if you’re brave, but don’t overdo it. Quickly immersing your feet in ice-cold water can be painful — although I suppose it would take your mind off the heat.
To turn down the heat a notch and look fabulous at the same time, you could buy this stunninglime-green cooling vest from Amazon. Its evaporative cooling system is designed so that if you soak it in cold water for a few minutes, you can — in theory — wear it and feel cool and comfortable for hours.
Actually, you can buy a whole range of clothing products that claim to keep you cool in the heat of the day.
My favorite by far is theFlexiFreeze Ice Vest, which not only lets you wear ice packs on your body but also gives the illusion of six-pack abs. I’msoputting that on my birthday wish list.
If strapping ice packs to your torso is a little too strange for you, however, consider cooling fitness clothing likeColumbia’s Omni-Freeze Zero lineorUnder Armour’s CoolSwitch line.
You don’t need specialized sheets to stay cool at night. Simply throw the ones you have in the freezer for a couple of hours before bedtime. Then, pull them out, put them on the bed, and enjoy the cool.
Just fall asleep quickly, because on an 80-degree night it probably won’t take long for the sheets to lose their chill.
Of course, it might become a bit inconvenient to remake your whole bed each night. So, maybe try this strategy with just your pillowcase and a top sheet.
Watch the video of ‘5 Odd but Effective Ways to Keep Cool Without A/C’ on MoneyTalksNews.com.
Head down to the basement on those scorching hot days. Our basement stays so chilly that we sometimes use blankets down there in the summer.
Some people may balk at this idea if their basement is unfinished. However, don’t let that stop you. Simply clean out a corner and set up a chair or maybe a desk. Personally, I would rather smell mustiness than melt into the floor upstairs.
Are you ready to get extreme? Then consider buying or building an underground home. Sure, you might not get much sunlight, but that’s a small trade-off to have your very own naturally cool hobbit house.
Often called earth homes, underground dwellings give you the same cool air of a basement without making you feel banished from your main living quarters. If you’re ready to get drastic, do a web search for “earth homes” or “underground homes” for inspiration.
For some less drastic but still effective tips, check out “It’s Heating Up — 17 Ways to Bring Down the Cost of Keeping Cool.”
What’s the weirdest method you’ve tried to stay cool? Let us know in a comment below or onour Facebook page.
This article was originally published onMoneyTalksNews.comas'5 Odd but Effective Ways to Keep Cool Without A/C'.
• 8 Ways to Bring in Extra Income During the Summer
• 8 Cheap Ways to Keep Your Car Running Cool in the Summer Heat
• 8 Ways to Cut Your Summer Cooling Costs |
Just a Roundup of Joe Biden's Questionable Advice to Young Girls
Photo credit: Scott Olson - Getty Images From ELLE Joe Biden is currently one of the 3,458 people running to be the 2020 Democratic presidential candidate, and his campaign has reminded people of something very important: Biden loves to give questionable advice to young women. After a tweet went viral about one recent interaction Biden had with a 13-year-old in Iowa, people started remembering some of the other "advice" he's given throughout the years. Here, a look into what the former vice president has said: "Youve got one job here, keep the guys away from your sister." Joe Biden meets a voters granddaughter in an Iowa coffee shop and asks her age. She says shes 13. He addresses her brothers. Youve got one job here, keep the guys away from your sister. - Liz Goodwin (@lizcgoodwin) June 12, 2019 As Liz Goodwin, a political reporter at The Boston Glob e , shared on Twitter, Biden was in an Iowa coffee shop when he met a voter's 13-year-old granddaughter. Upon doing so, he turned to her brothers and said, "Youve got one job here, keep the guys away from your sister." "No dating till you're 30, okay?" I met VP Biden about a decade ago, along with my (ex) wife. We told him our daughters were at home and would love to speak to them. We dialed them up, gave him the phone, and he said, "Hey, girls... this is Joe Biden. Listen, no dating till you're 30, okay?" https://t.co/JNipqdJSNS - Peter Sagal (@petersagal) June 12, 2019 Peter Sagal, the host of Wait, Wait... Don't Tell Me on NPR, tweeted that he met Biden about 10 years ago. Sagal told Biden his daughters were at home, so they gave them a call. When he got on the phone, Biden said, "Hey, girls... this is Joe Biden. Listen, no dating til you're 30, okay?" Story continues "No serious guys until you're 30." Photo credit: Scott Eisen - Getty Images Back in 2013, it was reported that Biden gave Sen. Orrin Hatch's granddaughter this very advice. "I hope you have a big fence around the house!" Photo credit: Drew Angerer - Getty Images Then in 2015, it was reported that Biden told Sen. Orrin Hatch's granddaughter he hopes she has a "big fence around the house." Not technically advice but still not great! "Just remember, no dates 'til you're 30." Photo credit: Alex Wong - Getty Images In 2011-you guessed it-Biden repeated this phrase over and over to young relatives of Sen. Barbara Mikulski, Sen. Michael Bennet, Sen. Chuck Schumer, and Sen. John Thune during a swearing in ceremony. "He told me not to date boys until I'm 30!" Photo credit: Win McNamee - Getty Images And a few months before the swearing in, he reportedly also told a 12-year-old, who took a picture with the vice president, the above advice. "You have one job: Keep boys away from your sister." Photo credit: Drew Angerer - Getty Images According to CNN , in 2012, Biden went to visit a fire department in North Carolina and told a young girl, "No dates until you're 30," and told the brother of another young girl, "You have one job: Keep boys away from your sister." Biden is nothing if not consistent. As such, this post will continue to be updated as more of his dating advice comes to light. ('You Might Also Like',) 10 Pairs of White Sneakers That Go With Everything 50 Surprising Things You Never Knew About 'Sex and the City' 20 Serums to Solve All Your Skincare Problems |
Read This Before You Buy Spark New Zealand Limited (NZSE:SPK) Because Of Its P/E Ratio
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This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). To keep it practical, we'll show how Spark New Zealand Limited's (NZSE:SPK) P/E ratio could help you assess the value on offer. Based on the last twelve months,Spark New Zealand's P/E ratio is 18.98. That corresponds to an earnings yield of approximately 5.3%.
View our latest analysis for Spark New Zealand
Theformula for P/Eis:
Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)
Or for Spark New Zealand:
P/E of 18.98 = NZ$3.89 ÷ NZ$0.20 (Based on the trailing twelve months to December 2018.)
The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. That isn't a good or a bad thing on its own, but a high P/E means that buyers have a higher opinion of the business's prospects, relative to stocks with a lower P/E.
When earnings fall, the 'E' decreases, over time. That means unless the share price falls, the P/E will increase in a few years. Then, a higher P/E might scare off shareholders, pushing the share price down.
Spark New Zealand shrunk earnings per share by 6.5% last year. But EPS is up 8.7% over the last 5 years.
The P/E ratio essentially measures market expectations of a company. The image below shows that Spark New Zealand has a lower P/E than the average (28.1) P/E for companies in the telecom industry.
This suggests that market participants think Spark New Zealand will underperform other companies in its industry. Many investors like to buy stocks when the market is pessimistic about their prospects. You should delve deeper. I like to checkif company insiders have been buying or selling.
The 'Price' in P/E reflects the market capitalization of the company. Thus, the metric does not reflect cash or debt held by the company. In theory, a company can lower its future P/E ratio by using cash or debt to invest in growth.
Such expenditure might be good or bad, in the long term, but the point here is that the balance sheet is not reflected by this ratio.
Spark New Zealand has net debt worth 19% of its market capitalization. This could bring some additional risk, and reduce the number of investment options for management; worth remembering if you compare its P/E to businesses without debt.
Spark New Zealand's P/E is 19 which is about average (17.9) in the NZ market. Given it has some debt, but didn't grow last year, the P/E indicates the market is expecting higher profits ahead for the business.
Investors have an opportunity when market expectations about a stock are wrong. As value investor Benjamin Graham famously said, 'In the short run, the market is a voting machine but in the long run, it is a weighing machine.' So thisfreevisualization of the analyst consensus on future earningscould help you make theright decisionabout whether to buy, sell, or hold.
But note:Spark New Zealand may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with strong recent earnings growth (and a P/E ratio below 20).
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Bayer seeks glyphosate litigation advice as Elliott reveals stake
FRANKFURT (Reuters) - Chemicals giant Bayer, under pressure from activist shareholders, said on Wednesday it has hired an external lawyer to advise its supervisory board and has set up a committee to help resolve a multi-billion dollar glyphosate litigation issue.
Bayer has seen its share price tumble in the wake of its $63 billion acquisition of Monsanto, which brought with it massive legal issues after more than 13,400 plaintiffs alleged the company's glyphosate weedkiller caused cancer.
Bayer, which acquired Monsanto last year, says studies and regulators have deemed glyphosate and Monsanto's Roundup weedkiller safe for human use, but the German company has struggled to contain the reputational and legal fallout.
German Chancellor Angela Merkel said on Wednesday that German farmers would stop using glyphosate eventually, a stance which is at odds with the Leverkusen-based company's view.
Activist shareholder Elliott Associates said it welcomed Bayer's new steps to improve supervision of litigation issues, as it revealed for the first time its holding of Bayer shares.
Bayer said it has hired U.S. lawyer John H. Beisner from Skadden, Arps, Slate Meagher & Flom LLP to advise the Supervisory Board on matters related to the glyphosate litigations, including trial tactics and mediation.
"His appointment is intended to add fresh and independent perspectives to the advice given to the Board of Management," Bayer said in a statement.
"We are convinced that with his expertise, John H. Beisner will provide very valuable and concrete advice on the ongoing litigation as well as the mediation," Bayer's Chairman Werner Wenning, said in the statement.
Bayer also said a new Supervisory Board committee, comprised of eight supervisory board members, will consult with the Board of Management and make recommendations on litigation strategy.
The company appears to have changed its approach to litigation, from taking a "we will prevail, we will fight to the end" attitude to seeking a settlement more quickly as a way to reassure investors and employees, a person familiar with the discussion told Reuters on Wednesday.
Elliott Associates revealed that it holds Bayer shares and financial instruments equivalent to 1.1 billion euros ($1.3 billion) worth of Bayer stock. Bayer's market value is 52.2 billion euros.
It is the first time that Elliott has acknowledged holding a significant stake in the German company. Reuters last year reported that Elliott had amassed a stake of under 3%, citing people familiar with the matter.
Elliott has a stake equivalent to 2.1% of Bayer shares, a source familiar with the matter said on Wednesday.
"Elliott welcomes these steps, and is confident that today’s statement marks a step change in Bayer’s approach to addressing the legal challenges currently facing the company," Elliott said in a separate statement.
Elliott said it believes that the creation of the special committee will provide a new level of oversight and a fresh perspective to a litigation strategy, which it said needs a radical overhaul.
Elliott also said Bayer could do more to maximize long-term value for all its stakeholders, saying the company had an opportunity to unlock more than 30 billion euros in value.
"Elliott looks forward to the company building upon today's announcement, and making a credible commitment to the exploration of long-term value creative levers beyond the immediate litigation and governance enhancements," it said.
Elliott wants Bayer to resolve its litigation issues as an immediate priority and is not pushing the company to pursue deeper structural changes right away, the source said.
(Reporting by Edward Taylor and Arno Schuetze; Editing by Tassilo Hummel, Edward Taylor and Susan Fenton) |
Something To Consider Before Buying Spark New Zealand Limited (NZSE:SPK) For The 6.0% Dividend
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Today we'll take a closer look at Spark New Zealand Limited (NZSE:SPK) from a dividend investor's perspective. Owning a strong business and reinvesting the dividends is widely seen as an attractive way of growing your wealth. If you are hoping to live on your dividends, it's important to be more stringent with your investments than the average punter. Regular readers know we like to apply the same approach to each dividend stock, and we hope you'll find our analysis useful.
With Spark New Zealand yielding 6.0% and having paid a dividend for over 10 years, many investors likely find the company quite interesting. We'd guess that plenty of investors have purchased it for the income. Some simple research can reduce the risk of buying Spark New Zealand for its dividend - read on to learn more.
Click the interactive chart for our full dividend analysis
Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. Spark New Zealand paid out 107% of its profit as dividends, over the trailing twelve month period. Unless there are extenuating circumstances, from the perspective of an investor who hopes to own the company for many years, a payout ratio of above 100% is definitely a concern.
In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. Spark New Zealand paid out 134% of its free cash last year. Cash flows can be lumpy, but this dividend was not well covered by cash flow. Paying out such a high percentage of cash flow suggests that the dividend was funded from either cash at bank or by borrowing, neither of which is desirable over the long term. Cash is slightly more important than profit from a dividend perspective, but given Spark New Zealand's payouts were not well covered by either earnings or cash flow, we would definitely be concerned about the sustainability of this dividend.
As Spark New Zealand's dividend was not well covered by earnings, we need to check its balance sheet for signs of financial distress. A rough way to check this is with these two simple ratios: a) net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and b) net interest cover. Net debt to EBITDA measures a company's total debt load relative to its earnings (lower = less debt), while net interest cover measures the company's ability to pay the interest on its debt (higher = greater ability to pay interest costs). Spark New Zealand has net debt of less than two times its earnings before interest, tax, depreciation, and amortisation (EBITDA), which we think is not too troublesome.
We calculated its interest cover by measuring its earnings before interest and tax (EBIT), and dividing this by the company's net interest expense. Net interest cover of 10.84 times its interest expense appears reasonable for Spark New Zealand, although we're conscious that even high interest cover doesn't make a company bulletproof.
We update our data on Spark New Zealand every 24 hours, so you can always getour latest analysis of its financial health, here.
Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. Spark New Zealand has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. Its dividend payments have fallen by 20% or more on at least one occasion over the past ten years. During the past ten-year period, the first annual payment was NZ$0.29 in 2009, compared to NZ$0.23 last year. The dividend has shrunk at around 2.1% a year during that period. Spark New Zealand's dividend hasn't shrunk linearly at 2.1% per annum, but the CAGR is a useful estimate of the historical rate of change.
We struggle to make a case for buying Spark New Zealand for its dividend, given that payments have shrunk over the past ten years.
With a relatively unstable dividend, it's even more important to see if earnings per share (EPS) are growing. Why take the risk of a dividend getting cut, unless there's a good chance of bigger dividends in future? Spark New Zealand has grown its earnings per share at 7.1% per annum over the past five years. Although per-share earnings are growing at a credible rate, virtually all of the income is being paid out as dividends to shareholders. This is okay, but may limit growth in the company's future dividend payments.
Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. It's a concern to see that the company paid out such a high percentage of its earnings and cashflow as dividends. Second, earnings growth has been ordinary, and its history of dividend payments is chequered - having cut its dividend at least once in the past. In this analysis, Spark New Zealand doesn't shape up too well as a dividend stock. We'd find it hard to look past the flaws, and would not be inclined to think of it as a reliable dividend-payer.
Earnings growth generally bodes well for the future value of company dividend payments. See if the 10 Spark New Zealand analysts we track are forecasting continued growth with ourfreereport on analyst estimates for the company.
We have also put together alist of global stocks with a market capitalisation above $1bn and yielding more 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
A Preview Of Accenture's Q3 Earnings
Accenture(NYSE:ACN) unveils its next round of earnings this Thursday, June 27. Get prepared with Benzinga's ultimate preview for Accenture's Q3 earnings.
Earnings and Revenue
Sell-side analysts expect Accenture's EPS to be near $1.89 on sales of $11.04 billion.
If the company were to post earnings inline with the consensus estimate when it reports Thursday, EPS would be up 5.59 percent. Revenue would be up 7.03 percent from the same quarter last year. Here's how the Accenture's reported EPS has stacked up against analyst estimates in the past:
View more earnings on ACN
[{"Quarter": "EPS Estimate", "Q2 2019": "1.57", "Q1 2019": "1.86", "Q4 2018": "1.56", "Q3 2018": "1.72"}, {"Quarter": "EPS Actual", "Q2 2019": "1.73", "Q1 2019": "1.96", "Q4 2018": "1.58", "Q3 2018": "1.79"}]
Stock Performance
Over the last 52-week period, shares are up 18.4 percent. Given that these returns are generally positive, long-term shareholders can relax going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.
Analyst estimates are adjusted higher for EPS and revenues over the past 90 days. Analysts generally rate Accenture stock as Neutral. The strength of this rating has maintained conviction over the past three months.
Conference Call
Don't be surprised to see the stock move on comments made during its conference call. Accenture is scheduled to hold the call at 8:00 a.m. ET and can be accessed here:https://78449.choruscall.com/dataconf/productusers/acn/mediaframe/29664/indexr.html
See more from Benzinga
• Shaw Communications Q3 Earnings Outlook
• Q3 Earnings Preview For Schnitzer Steel
• IHS Markit Q2 Earnings Preview
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. |
Is an earnings recession on the horizon?
Profits reports are beginning to trickle into the market, and they’re painting a troubling picture for much of corporate America, especially for multinational companies with exposure to China.
Tematica Research’s chief investment officer, Chris Versace, thinkscurrent earnings expectationsfor the second half of the year are “way too high.”
“We have a slowing globaleconomy,slowing U.S economy, and nobenefit from tax reform. We have tariffs and a lot of uncertainty going into the back end of the year,” Versace said on Yahoo Finance’s “The First Trade.”
According to the latest FactSet calculations, earnings are on pace to post negative growth for three consecutive quarters. The last time that happened was during the earnings recession from Q4 2015 to Q2 2016.
“You’re going to see companies issuemore conservative guidance,” Versace says, “which brings the overall EPS down for the year, inflates the P/E, and I think people are going to start wondering why is the Fed cutting [interest rates]… if they do that.”
FactSet recently changed its third-quarter outlook from a gain of 0.2% to a decline of 0.3%. That’s on top of an expected decline in second-quarter earnings of 2.6%, and a 0.3% pullback in first-quarter earnings.
A handful of companies have begun reporting dimmer business outlooks. FedEx(FDX)reported that its resultsfor the current fiscal year would benegatively impactedby “weakness in global trade and industrial production.”
Chipmaker Micron Technologies(MU)surprised Wall Street with better-than-expectedquarterly earnings, despite bubbling trade tensions between the U.S. and China. However, the CEO noted inventories are high, pricing is under pressure and they expect a pullback in spending on capital expenditures.
Earlier this month several chipmakers, including Skyworks(SWKS)and Qorvo(QRVO), lowered their guidance because of the White House ban on U.S.companies selling productsto Chinesetech giant Huawei.
Lennar(LEN)beat quarterly earnings expectations thanks tolower mortgage ratesand strong incentives for homebuyers, but the stock was punished after the homebuilder said tariffs on Chinese goods are costing the company an average of about $500 per home.
Versace said those companies are just the tip of the iceberg. “I believe there is more risk to the downside for this earnings season,” he said.
In addition to earnings, Versace believes theFederal Reserve could be a wild cardfor the markets and profits in the second half of the year.
He predicts if we get no progress on China trade following the G20 summit in Japan this weekend, the Fed will sit on its hands and not cut interest rates at its July meeting.
“They’ll wait and see what more economic data has to say,” he said. “They have three other meetings after July, so they haveplenty of time.”
Alexis Christoforous is co-anchor of Yahoo Finance’s “The First Trade.” Follow her on Twitter@AlexisTVNews.
Read more:
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Is Revance Therapeutics Inc (RVNC) A Good Stock To Buy?
Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards Revance Therapeutics Inc (NASDAQ:RVNC).
Revance Therapeutics Inc (NASDAQ:RVNC)has experienced an increase in enthusiasm from smart money lately. Our calculations also showed that RVNC isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to take a look at the key hedge fund action encompassing Revance Therapeutics Inc (NASDAQ:RVNC).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in RVNC over the last 15 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Among these funds,Renaissance Technologiesheld the most valuable stake in Revance Therapeutics Inc (NASDAQ:RVNC), which was worth $14.2 million at the end of the first quarter. On the second spot was Sio Capital which amassed $4 million worth of shares. Moreover, Citadel Investment Group, MFN Partners, and Two Sigma Advisors were also bullish on Revance Therapeutics Inc (NASDAQ:RVNC), allocating a large percentage of their portfolios to this stock.
Consequently, key money managers have been driving this bullishness.Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the most outsized position in Revance Therapeutics Inc (NASDAQ:RVNC). Two Sigma Advisors had $0.6 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace'sMarshall Wace LLPalso initiated a $0.5 million position during the quarter. The other funds with new positions in the stock are Ken Griffin'sCitadel Investment Groupand Mike Vranos'sEllington.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Revance Therapeutics Inc (NASDAQ:RVNC) but similarly valued. These stocks are Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQ:NFBK), US Concrete Inc (NASDAQ:USCR), EMC Insurance Group Inc. (NASDAQ:EMCI), and Organogenesis Holdings Inc. (NASDAQ:ORGO). All of these stocks' market caps are similar to RVNC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NFBK,5,32141,1 USCR,17,76849,-1 EMCI,6,27213,1 ORGO,4,19046,-4 Average,8,38812,-0.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $25 million in RVNC's case. US Concrete Inc (NASDAQ:USCR) is the most popular stock in this table. On the other hand Organogenesis Holdings Inc. (NASDAQ:ORGO) is the least popular one with only 4 bullish hedge fund positions. Revance Therapeutics Inc (NASDAQ:RVNC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately RVNC wasn't nearly as popular as these 20 stocks and hedge funds that were betting on RVNC were disappointed as the stock returned -26.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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The Spark New Zealand (NZSE:SPK) Share Price Has Gained 45% And Shareholders Are Hoping For More
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If you buy and hold a stock for many years, you'd hope to be making a profit. Furthermore, you'd generally like to see the share price rise faster than the market Unfortunately for shareholders, while theSpark New Zealand Limited(NZSE:SPK) share price is up 45% in the last five years, that's less than the market return. But if you include dividends then the return is market-beating. The last year hasn't been great either, with the stock up just 3.7%.
View our latest analysis for Spark New Zealand
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Over half a decade, Spark New Zealand managed to grow its earnings per share at 8.7% a year. This EPS growth is reasonably close to the 7.7% average annual increase in the share price. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Indeed, it would appear the share price is reacting to the EPS.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Dive deeper into Spark New Zealand's key metrics by checking this interactive graph of Spark New Zealand'searnings, revenue and cash flow.
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Spark New Zealand's TSR for the last 5 years was 114%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted thetotalshareholder return.
Spark New Zealand provided a TSR of 12% over the last twelve months. But that was short of the market average. If we look back over five years, the returns are even better, coming in at 16% per year for five years. Maybe the share price is just taking a breather while the business executes on its growth strategy. Before forming an opinion on Spark New Zealand you might want to consider the cold hard cash it pays as a dividend. Thisfreechart tracks its dividend over time.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NZ exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Here is What Hedge Funds Think About Hersha Hospitality Trust (HT)
It was a rough fourth quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 18.7% so far in 2019 and outperformed the S&P 500 ETF by 6.6 percentage points. We are done processing the latest 13f filings and in this article we will study how hedge fund sentiment towards Hersha Hospitality Trust (NYSE:HT) changed during the first quarter.
Hersha Hospitality Trust (NYSE:HT)has experienced a decrease in activity from the world's largest hedge funds lately. Our calculations also showed that HT isn't among the30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We're going to review the fresh hedge fund action encompassing Hersha Hospitality Trust (NYSE:HT).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in HT over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,Balyasny Asset Managementwas the largest shareholder of Hersha Hospitality Trust (NYSE:HT), with a stake worth $8.6 million reported as of the end of March. Trailing Balyasny Asset Management was Millennium Management, which amassed a stake valued at $7.5 million. Citadel Investment Group, Renaissance Technologies, and GLG Partners were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that Hersha Hospitality Trust (NYSE:HT) has experienced bearish sentiment from the smart money, logic holds that there were a few hedge funds who sold off their positions entirely in the third quarter. It's worth mentioning that Brian Gustavson and Andrew Haley's1060 Capital Managementcut the largest stake of the 700 funds tracked by Insider Monkey, worth about $12.6 million in stock. Ken Grossman and Glen Schneider's fund,SG Capital Management, also said goodbye to its stock, about $4.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 1 funds in the third quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Hersha Hospitality Trust (NYSE:HT) but similarly valued. We will take a look at Intra-Cellular Therapies Inc (NASDAQ:ITCI), Global Partners LP (NYSE:GLP), Axonics Modulation Technologies, Inc. (NASDAQ:AXNX), and QuinStreet Inc (NASDAQ:QNST). This group of stocks' market valuations are closest to HT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ITCI,12,43843,-3 GLP,5,2786,1 AXNX,10,85113,0 QNST,25,200135,-2 Average,13,82969,-1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $83 million. That figure was $33 million in HT's case. QuinStreet Inc (NASDAQ:QNST) is the most popular stock in this table. On the other hand Global Partners LP (NYSE:GLP) is the least popular one with only 5 bullish hedge fund positions. Hersha Hospitality Trust (NYSE:HT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately HT wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HT investors were disappointed as the stock returned -0.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About United Natural Foods, Inc. (UNFI)
"The end to the U.S. Government shutdown, reports of progress on China-U.S. trade talks, and the Federal Reserve’s confirmation that it did not plan further interest rate hikes in 2019 allayed investor fears and drove U.S. markets substantially higher in the first quarter of the year. Global markets followed suit pretty much across the board delivering what some market participants described as a “V-shaped” recovery," This is how Evermore Global Value summarized the first quarter in itsinvestor letter. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards one of the stocks hedge funds invest in.
IsUnited Natural Foods, Inc. (NYSE:UNFI)ready to rally soon? Money managers are getting less bullish. The number of bullish hedge fund positions went down by 3 lately. Our calculations also showed that unfi isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a glance at the recent hedge fund action encompassing United Natural Foods, Inc. (NYSE:UNFI).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards UNFI over the last 15 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Chuck Royce'sRoyce & Associateshas the biggest position in United Natural Foods, Inc. (NYSE:UNFI), worth close to $10.5 million, amounting to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot isTwo Sigma Advisors, led by John Overdeck and David Siegel, holding a $9.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism consist of Charles Lemonides'sValueworks LLC, Ken Griffin'sCitadel Investment Groupand Jonathan Kolatch'sRedwood Capital Management.
Seeing as United Natural Foods, Inc. (NYSE:UNFI) has experienced a decline in interest from hedge fund managers, it's safe to say that there is a sect of hedge funds that slashed their entire stakes last quarter. It's worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capitalcut the biggest investment of all the hedgies watched by Insider Monkey, totaling an estimated $10.4 million in stock. Cliff Asness's fund,AQR Capital Management, also sold off its stock, about $1.9 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as United Natural Foods, Inc. (NYSE:UNFI) but similarly valued. These stocks are Byline Bancorp, Inc. (NYSE:BY), Dime Community Bancshares, Inc. (NASDAQ:DCOM), Hersha Hospitality Trust (NYSE:HT), and Intra-Cellular Therapies Inc (NASDAQ:ITCI). This group of stocks' market caps resemble UNFI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BY,3,17716,-3 DCOM,8,38136,-1 HT,12,33060,-1 ITCI,12,43843,-3 Average,8.75,33189,-2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $48 million in UNFI's case. Hersha Hospitality Trust (NYSE:HT) is the most popular stock in this table. On the other hand Byline Bancorp, Inc. (NYSE:BY) is the least popular one with only 3 bullish hedge fund positions. United Natural Foods, Inc. (NYSE:UNFI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately UNFI wasn't nearly as popular as these 20 stocks and hedge funds that were betting on UNFI were disappointed as the stock returned -27.9% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Intra-Cellular Therapies Inc (ITCI)
"Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn't by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today's darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn't attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal," said Vilas Fund in itsQ1 investor letter. We aren't sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That's why we believe it would be worthwhile to take a look at the hedge fund sentiment on Intra-Cellular Therapies Inc (NASDAQ:ITCI) in order to identify whether reputable and successful top money managers continue to believe in its potential.
Intra-Cellular Therapies Inc (NASDAQ:ITCI)was in 12 hedge funds' portfolios at the end of the first quarter of 2019. ITCI has seen a decrease in support from the world's most elite money managers of late. There were 15 hedge funds in our database with ITCI positions at the end of the previous quarter. Our calculations also showed that itci isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's review the latest hedge fund action surrounding Intra-Cellular Therapies Inc (NASDAQ:ITCI).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ITCI over the last 15 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey,Samlyn Capital, managed by Robert Pohly, holds the largest position in Intra-Cellular Therapies Inc (NASDAQ:ITCI). Samlyn Capital has a $16.6 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot isMillennium Management, led by Israel Englander, holding a $8.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions comprise Principal Global Investors'sColumbus Circle Investors, D. E. Shaw'sD E Shawand Noam Gottesman'sGLG Partners.
Due to the fact that Intra-Cellular Therapies Inc (NASDAQ:ITCI) has experienced a decline in interest from the smart money, we can see that there lies a certain "tier" of funds that decided to sell off their entire stakes in the third quarter. It's worth mentioning that Steve Cohen'sPoint72 Asset Managementsold off the largest investment of the 700 funds watched by Insider Monkey, comprising about $3.4 million in stock, and Thomas Steyer's Farallon Capital was right behind this move, as the fund dumped about $2.8 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 3 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Intra-Cellular Therapies Inc (NASDAQ:ITCI) but similarly valued. These stocks are Global Partners LP (NYSE:GLP), Axonics Modulation Technologies, Inc. (NASDAQ:AXNX), QuinStreet Inc (NASDAQ:QNST), and Urstadt Biddle Properties Inc. (NYSE:UBP). This group of stocks' market valuations match ITCI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLP,5,2786,1 AXNX,10,85113,0 QNST,25,200135,-2 UBP,2,12578,0 Average,10.5,75153,-0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $44 million in ITCI's case. QuinStreet Inc (NASDAQ:QNST) is the most popular stock in this table. On the other hand Urstadt Biddle Properties Inc. (NYSE:UBP) is the least popular one with only 2 bullish hedge fund positions. Intra-Cellular Therapies Inc (NASDAQ:ITCI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on ITCI as the stock returned 15.7% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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US warns Turkey it faces sanctions if it buys Russian system
BRUSSELS (AP) — Acting U.S. Defense Secretary Mark Esper made it clear to Turkey on Wednesday that it will face economic sanctions if it goes ahead with the purchase of a Russian missile defense system, as the standoff between the two NATO allies dragged on. Esper met with Turkish Defense Minister Hulusi Akar during a NATO meeting, delivering a familiar U.S. message: If Turkey buys the Russian S-400 system, it will not be allowed to buy the high-tech F-35 fighter jet. The meeting, however, ended with no discernable results. A senior defense official traveling with Esper said the two men had a frank and candid discussion, but the meeting resulted in no movement or change of position on either side. The official spoke on condition of anonymity to discuss a private meeting. Turkey has said that it won't bow to U.S. ultimatums and that the S-400 purchase is a done deal. The U.S. has repeatedly said that the Russian system is a threat to the fighter jet and that Turkey will be dropped from the F-35 program if it buys the S-400. U.S. officials have encouraged Turkey to buy the American-made Patriot missile defense system instead. Speaking to reporters traveling with him to the NATO meeting, Esper, who took over as acting defense chief on Monday, said his message is pretty straightforward. "Turkey has been a longstanding and trusted partner and ally for many, many years," he said. "The pursuit of the S-400 undermines that." The U.S. has already stopped training Turkish pilots on the F-35, and given Ankara until the end of July to get its personnel out of the U.S. U.S. officials said Esper also told Akar during the meeting that until Turkey takes possession of the Russian system, there's an opportunity to turn things around. The session between Esper and Akar is viewed as a precursor to the expected meeting between U.S. President Donald Trump and Turkish President Recep Tayyip Erdogan during the Group of 20 meeting in Japan later this week. Story continues Erdogan told reporters in Ankara on Thursday that Trump in their discussions has not given him the impression that the United States would impose sanctions on Turkey. He repeated that the deal with Russia has been sealed and that Turkey was now waiting to take delivery of the S-400 systems. "If NATO allies are now imposing sanctions on each other, I don't know anything about that," Erdogan said. "These are not impressions I got from the talks I have had with Mr. Trump until now." Erdogan has said that the training of Turkish personnel on the S-400 is finished and that the delivery of the system will take place in the first 15 days of next month. He said he also hopes to use the Trump meeting to dissuade the U.S. from imposing sanctions. |
Here is What Hedge Funds Think About Lexicon Pharmaceuticals, Inc. (LXRX)
Is Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
IsLexicon Pharmaceuticals, Inc. (NASDAQ:LXRX)ready to rally soon? Prominent investors are betting on the stock. The number of long hedge fund bets went up by 1 recently. Our calculations also showed that lxrx isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a look at the fresh hedge fund action surrounding Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from one quarter earlier. On the other hand, there were a total of 8 hedge funds with a bullish position in LXRX a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) was held byRenaissance Technologies, which reported holding $2.7 million worth of stock at the end of March. It was followed by Citadel Investment Group with a $1.7 million position. Other investors bullish on the company included D E Shaw, PDT Partners, and Blue Mountain Capital.
As industrywide interest jumped, key money managers were leading the bulls' herd.Blue Mountain Capital, managed by Andrew Feldstein and Stephen Siderow, established the largest position in Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). Blue Mountain Capital had $0.6 million invested in the company at the end of the quarter. David M. Knott'sDorset Managementalso initiated a $0.2 million position during the quarter. The following funds were also among the new LXRX investors: Jeffrey Talpins'sElement Capital Managementand Michael Platt and William Reeves'sBlueCrest Capital Mgmt..
Let's check out hedge fund activity in other stocks similar to Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). We will take a look at Costamare Inc (NYSE:CMRE), Dorchester Minerals LP (NASDAQ:DMLP), RISE Education Cayman Ltd (NASDAQ:REDU), and Amerant Bancorp Inc. (NASDAQ:AMTB). All of these stocks' market caps are closest to LXRX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CMRE,9,16990,-1 DMLP,6,34031,0 REDU,3,5414,-1 AMTB,5,9540,2 Average,5.75,16494,0 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $9 million in LXRX's case. Costamare Inc (NYSE:CMRE) is the most popular stock in this table. On the other hand RISE Education Cayman Ltd (NASDAQ:REDU) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on LXRX as the stock returned 12.4% during the same period and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Grupo Supervielle S.A. (SUPV)
Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of March. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Grupo Supervielle S.A. (NYSE:SUPV), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Grupo Supervielle S.A. (NYSE:SUPV)shareholders have witnessed an increase in support from the world's most elite money managers recently.SUPVwas in 12 hedge funds' portfolios at the end of the first quarter of 2019. There were 10 hedge funds in our database with SUPV positions at the end of the previous quarter. Our calculations also showed that supv isn't among the30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_735677" align="aligncenter" width="473"]
Sander Gerber of Hudson Bay Capital[/caption]
Let's check out the latest hedge fund action encompassing Grupo Supervielle S.A. (NYSE:SUPV).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SUPV over the last 15 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
The largest stake in Grupo Supervielle S.A. (NYSE:SUPV) was held byKora Management, which reported holding $14.6 million worth of stock at the end of March. It was followed by Hudson Bay Capital Management with a $5.2 million position. Other investors bullish on the company included Odey Asset Management Group, Highland Capital Management, and Millennium Management.
Now, specific money managers were leading the bulls' herd.D E Shaw, managed by D. E. Shaw, initiated the most outsized position in Grupo Supervielle S.A. (NYSE:SUPV). D E Shaw had $1.5 million invested in the company at the end of the quarter. Ken Griffin'sCitadel Investment Groupalso initiated a $0.3 million position during the quarter. The following funds were also among the new SUPV investors: Michael Platt and William Reeves'sBlueCrest Capital Mgmt.and David Harding'sWinton Capital Management.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Grupo Supervielle S.A. (NYSE:SUPV) but similarly valued. We will take a look at TORM plc (NASDAQ:TRMD), Textainer Group Holdings Limited (NYSE:TGH), Model N Inc (NYSE:MODN), and SunCoke Energy, Inc (NYSE:SXC). This group of stocks' market caps match SUPV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRMD,4,388338,1 TGH,10,20500,3 MODN,16,101079,2 SXC,21,96805,4 Average,12.75,151681,2.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $152 million. That figure was $33 million in SUPV's case. SunCoke Energy, Inc (NYSE:SXC) is the most popular stock in this table. On the other hand TORM plc (NASDAQ:TRMD) is the least popular one with only 4 bullish hedge fund positions. Grupo Supervielle S.A. (NYSE:SUPV) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on SUPV as the stock returned 16.9% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Ribbon Communications Inc. (RBBN)
We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article, we look at what those funds think of Ribbon Communications Inc. (NASDAQ:RBBN) based on that data.
Ribbon Communications Inc. (NASDAQ:RBBN)investors should pay attention to a decrease in activity from the world's largest hedge funds of late. Our calculations also showed that RBBN isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_733253" align="aligncenter" width="473"]
Arnaud Ajdler Engine Capital[/caption]
Let's take a look at the recent hedge fund action regarding Ribbon Communications Inc. (NASDAQ:RBBN).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RBBN over the last 15 quarters. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Among these funds,Royce & Associatesheld the most valuable stake in Ribbon Communications Inc. (NASDAQ:RBBN), which was worth $10.6 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $10.5 million worth of shares. Moreover, D E Shaw, Arrowstreet Capital, and Engine Capital were also bullish on Ribbon Communications Inc. (NASDAQ:RBBN), allocating a large percentage of their portfolios to this stock.
Judging by the fact that Ribbon Communications Inc. (NASDAQ:RBBN) has witnessed bearish sentiment from the smart money, logic holds that there is a sect of hedge funds that elected to cut their entire stakes in the third quarter. It's worth mentioning that Josh Goldberg'sG2 Investment Partners Managementsaid goodbye to the biggest position of the "upper crust" of funds tracked by Insider Monkey, comprising about $1.2 million in stock, and Peter Algert and Kevin Coldiron's Algert Coldiron Investors was right behind this move, as the fund dropped about $0.8 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 3 funds in the third quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Ribbon Communications Inc. (NASDAQ:RBBN) but similarly valued. We will take a look at Magenta Therapeutics, Inc. (NASDAQ:MGTA), Surgery Partners, Inc. (NASDAQ:SGRY), Himax Technologies, Inc. (NASDAQ:HIMX), and Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX). This group of stocks' market caps match RBBN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MGTA,8,85467,0 SGRY,9,41566,0 HIMX,9,22253,0 CRNX,9,234194,2 Average,8.75,95870,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $37 million in RBBN's case. Surgery Partners, Inc. (NASDAQ:SGRY) is the most popular stock in this table. On the other hand Magenta Therapeutics, Inc. (NASDAQ:MGTA) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Ribbon Communications Inc. (NASDAQ:RBBN) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately RBBN wasn't nearly as popular as these 20 stocks and hedge funds that were betting on RBBN were disappointed as the stock returned -8.9% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Castlight Health Inc (CSLT)
Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of March. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Castlight Health Inc (NYSE:CSLT), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Hedge fund interest inCastlight Health Inc (NYSE:CSLT)shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare CSLT to other stocks including GlycoMimetics, Inc. (NASDAQ:GLYC), ORBCOMM Inc (NASDAQ:ORBC), and Mercantile Bank Corp. (NASDAQ:MBWM) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's analyze the recent hedge fund action surrounding Castlight Health Inc (NYSE:CSLT).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards CSLT over the last 15 quarters. With the smart money's capital changing hands, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
More specifically,Maverick Capitalwas the largest shareholder of Castlight Health Inc (NYSE:CSLT), with a stake worth $6.6 million reported as of the end of March. Trailing Maverick Capital was Royce & Associates, which amassed a stake valued at $5.7 million. Renaissance Technologies, D E Shaw, and GMT Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Since Castlight Health Inc (NYSE:CSLT) has faced a decline in interest from the smart money, we can see that there is a sect of funds that elected to cut their full holdings in the third quarter. At the top of the heap, William C. Martin'sRaging Capital Managementdropped the biggest position of the 700 funds watched by Insider Monkey, totaling an estimated $1.6 million in stock, and Phil Frohlich's Prescott Group Capital Management was right behind this move, as the fund dropped about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks similar to Castlight Health Inc (NYSE:CSLT). These stocks are GlycoMimetics, Inc. (NASDAQ:GLYC), ORBCOMM Inc (NASDAQ:ORBC), Mercantile Bank Corp. (NASDAQ:MBWM), and Overstock.com, Inc. (NASDAQ:OSTK). This group of stocks' market values are similar to CSLT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLYC,8,52173,-2 ORBC,16,95540,4 MBWM,7,27981,1 OSTK,13,20298,3 Average,11,48998,1.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $29 million in CSLT's case. ORBCOMM Inc (NASDAQ:ORBC) is the most popular stock in this table. On the other hand Mercantile Bank Corp. (NASDAQ:MBWM) is the least popular one with only 7 bullish hedge fund positions. Castlight Health Inc (NYSE:CSLT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CSLT wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CSLT were disappointed as the stock returned -17.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Montage Resources Corporation (MR)
Hedge funds are known to underperform the bull markets but that's not because they are bad at investing. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. Hedge funds underperform because they are hedged. The Standard and Poor’s 500 Index returned approximately 12.1% in the first 5 months of this year through May 30th (including dividend payments). Conversely, hedge funds’ top 20 large-cap stock picks generated a return of 18.7% during the same 5-month period. An average long/short hedge fund returned only a fraction of this due to the hedges they implement and the large fees they charge. Our research covering the last 18 years indicates that investors can outperform the market by imitating hedge funds' stock picks rather than directly investing in hedge funds. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Montage Resources Corporation (NYSE:MR).
Montage Resources Corporation (NYSE:MR)has seen an increase in hedge fund interest recently.MRwas in 12 hedge funds' portfolios at the end of the first quarter of 2019. There were 8 hedge funds in our database with MR positions at the end of the previous quarter. Our calculations also showed that mr isn't among the30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to check out the recent hedge fund action regarding Montage Resources Corporation (NYSE:MR).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MR over the last 15 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Axar Capitalheld the most valuable stake in Montage Resources Corporation (NYSE:MR), which was worth $18.8 million at the end of the first quarter. On the second spot was Raging Capital Management which amassed $14.5 million worth of shares. Moreover, GLG Partners, MAK Capital One, and D E Shaw were also bullish on Montage Resources Corporation (NYSE:MR), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, some big names were breaking ground themselves.Axar Capital, managed by Andrew Axelrod, assembled the biggest position in Montage Resources Corporation (NYSE:MR). Axar Capital had $18.8 million invested in the company at the end of the quarter. William C. Martin'sRaging Capital Managementalso made a $14.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Noam Gottesman'sGLG Partners, Michael Kaufman'sMAK Capital One, and D. E. Shaw'sD E Shaw.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Montage Resources Corporation (NYSE:MR) but similarly valued. We will take a look at Boston Omaha Corporation (NASDAQ:BOMN), TuanChe Limited (NASDAQ:TC), Sterling Bancorp, Inc. (Southfield, MI) (NASDAQ:SBT), and Independence Holding Company (NYSE:IHC). All of these stocks' market caps are similar to MR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BOMN,5,261009,1 TC,1,283,1 SBT,7,28083,-3 IHC,2,15360,-1 Average,3.75,76184,-0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 3.75 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $53 million in MR's case. Sterling Bancorp, Inc. (Southfield, MI) (NASDAQ:SBT) is the most popular stock in this table. On the other hand TuanChe Limited (NASDAQ:TC) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Montage Resources Corporation (NYSE:MR) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately MR wasn't nearly as popular as these 20 stocks and hedge funds that were betting on MR were disappointed as the stock returned -55.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Catalyst Pharmaceuticals, Inc. (CPRX)
Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients' money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth also depends on it. Regardless of the various methods used by elite investors like David Tepper and David Abrams, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
IsCatalyst Pharmaceuticals, Inc. (NASDAQ:CPRX)a worthy stock to buy now? Prominent investors are getting more bullish. The number of long hedge fund positions improved by 2 recently. Our calculations also showed that cprx isn't among the30 most popular stocks among hedge funds.CPRXwas in 12 hedge funds' portfolios at the end of the first quarter of 2019. There were 10 hedge funds in our database with CPRX positions at the end of the previous quarter.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let's view the fresh hedge fund action surrounding Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. On the other hand, there were a total of 15 hedge funds with a bullish position in CPRX a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
More specifically,Consonance Capital Managementwas the largest shareholder of Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX), with a stake worth $91.2 million reported as of the end of March. Trailing Consonance Capital Management was Broadfin Capital, which amassed a stake valued at $29.9 million. Mangrove Partners, Baker Bros. Advisors, and Opaleye Management were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key money managers were leading the bulls' herd.Opaleye Management, managed by James A. Silverman, initiated the largest position in Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX). Opaleye Management had $9.3 million invested in the company at the end of the quarter. David Brown'sHawk Ridge Managementalso initiated a $3.3 million position during the quarter. The following funds were also among the new CPRX investors: David Harding'sWinton Capital Managementand Ken Griffin'sCitadel Investment Group.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) but similarly valued. These stocks are Matrix Service Co (NASDAQ:MTRX), Heritage Commerce Corp. (NASDAQ:HTBK), First Community Bancshares Inc (NASDAQ:FCBC), and ArQule, Inc. (NASDAQ:ARQL). This group of stocks' market values are closest to CPRX's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MTRX,15,31874,-4 HTBK,7,21498,-2 FCBC,4,9920,1 ARQL,15,118564,1 Average,10.25,45464,-1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $178 million in CPRX's case. Matrix Service Co (NASDAQ:MTRX) is the most popular stock in this table. On the other hand First Community Bancshares Inc (NASDAQ:FCBC) is the least popular one with only 4 bullish hedge fund positions. Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CPRX wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CPRX were disappointed as the stock returned -26.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Universal Electronics Inc (UEIC)
Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients' money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth also depends on it. Regardless of the various methods used by elite investors like David Tepper and David Abrams, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
IsUniversal Electronics Inc (NASDAQ:UEIC)an excellent investment now? The best stock pickers are in a bullish mood. The number of bullish hedge fund bets increased by 6 recently. Our calculations also showed that ueic isn't among the30 most popular stocks among hedge funds.
To the average investor there are dozens of metrics stock traders use to assess stocks. Some of the most underrated metrics are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the best money managers can beat the broader indices by a very impressive margin (see the details here).
Let's go over the key hedge fund action regarding Universal Electronics Inc (NASDAQ:UEIC).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 100% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in UEIC over the last 15 quarters. With the smart money's sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database,Millennium Management, managed by Israel Englander, holds the biggest position in Universal Electronics Inc (NASDAQ:UEIC). Millennium Management has a $7.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second isSG Capital Management, managed by Ken Grossman and Glen Schneider, which holds a $5 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Other peers that are bullish include Ken Griffin'sCitadel Investment Group, D. E. Shaw'sD E Shawand John Overdeck and David Siegel'sTwo Sigma Advisors.
As aggregate interest increased, specific money managers were leading the bulls' herd.SG Capital Management, managed by Ken Grossman and Glen Schneider, initiated the biggest position in Universal Electronics Inc (NASDAQ:UEIC). SG Capital Management had $5 million invested in the company at the end of the quarter. John Overdeck and David Siegel'sTwo Sigma Advisorsalso initiated a $2.8 million position during the quarter. The other funds with brand new UEIC positions are Josh Goldberg'sG2 Investment Partners Management, Minhua Zhang'sWeld Capital Management, and Matthew Hulsizer'sPEAK6 Capital Management.
Let's also examine hedge fund activity in other stocks similar to Universal Electronics Inc (NASDAQ:UEIC). We will take a look at Attunity Ltd (NASDAQ:ATTU), Avianca Holdings SA (NYSE:AVH), Capitol Investment Corp. IV (NYSE:CIC), and American Outdoor Brands Corporation (NASDAQ:AOBC). This group of stocks' market caps match UEIC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ATTU,18,158528,1 AVH,4,6454,0 CIC,15,169328,1 AOBC,15,81359,1 Average,13,103917,0.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $104 million. That figure was $26 million in UEIC's case. Attunity Ltd (NASDAQ:ATTU) is the most popular stock in this table. On the other hand Avianca Holdings SA (NYSE:AVH) is the least popular one with only 4 bullish hedge fund positions. Universal Electronics Inc (NASDAQ:UEIC) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on UEIC as the stock returned 15.2% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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UPDATE 1-U.S. court to decide which of two Venezuelan boards runs Citgo Petroleum
(Adds details on the lawsuit, context)
June 26 (Reuters) - A U.S. court will decide whether a board of directors appointed by Venezuelan President Nicolas Maduro or one backed by his rival, opposition leader Juan Guaido, runs the eighth-largest U.S. refiner, Citgo Petroleum Corp.
A lawsuit filed on Tuesday by Maduro's administration in Delaware Chancery Court seeks to reassert its control over Citgo , along with other U.S. subsidiaries of Venezuelan state-run oil company PDVSA.
Citgo, Venezuela's most important foreign asset, has been caught in a tug-of-war as U.S. President Donald Trump's government has tried to use the company as leverage to topple Maduro.
The lawsuit seeks control over Citgo's nearly $30 billion in revenue by having the court recognize the five-person board handpicked by Maduro as legally appointed.
Guaido, head of the opposition-controlled legislature, assumed a rival interim presidency in January, denouncing Maduro as a usurper who had secured re-election last year in a vote widely considered fraudulent.
In February, he appointed an ad-hoc PDVSA board with rights to nominate new directors for its U.S. units PDV Holding, Citgo Holding and Citgo Petroleum.
But Maduro, a socialist who says he is the victim of an attempted U.S.-led coup, retains the support of the armed forces and PDVSA, and still controls most state functions.
As president, he has full authority under PDVSA's bylaws to name its board of directors, the lawsuit states. It notes that the Guaido-appointed board has already been invalidated by Venezuela's Supreme Court, which remains loyal to Maduro.
Luisa Palacios assumed the position of Citgo's chairwoman under Guaido and has been running the company along with Venezuelan and U.S. executives, who are currently looking for a new CEO for the refining firm.
Citgo's previous government-appointed chief, Asdrubal Chavez, lost control of the unit and his Venezuelan board members were fired.
"PDVSA and its wholly owned subsidiaries are currently experiencing a crisis of leadership due to multiple parties asserting the right to name the board of directors," the Maduro administration said in the complaint filed Tuesday.
Citgo and PDVSA did not immediately reply to requests for comment.
The action against the Palacios-led board seeks "declaratory and injunctive relief to determine the proper composition" of the boards of directors for Citgo and the other two companies.
Washington, which backs Guaido, imposed sanctions on Venezuela and PDVSA in late January, aimed at curbing exports to the United States and upping the pressure on Maduro to step aside. Since then, oil shipments have declined about 40%. (Reporting by Jonathan Stempel and Marianna Parraga; Editing by Tom Brown) |
Embattled NRA Loses Its Political Power Broker on Eve of 2020
As the National Rifle Association’s chief lobbyist, Chris Cox pumped more money into the unlikely election of Donald Trump than anyone else. Now, Cox won’t be around to oversee its effort to re-elect him.
Until his resignation was made public on Wednesday, Cox had spent 17 years as the executive director of the NRA’s Institute for Legislative Action. He headed its political action committee and was the NRA’s power broker and liaison with Congress, the White House and federal agencies, and he oversaw the rewarding of reliable conservative politicians with “A” ratings for fortifying the Second Amendment. The Tennessee-bred lobbyist also ran NRA Country, the group’s marketing link to the music industry. Cox’s many roles gave him extraordinary influence on U.S. firearms regulation and Republican politics writ large.
Cox was placed on administrative leave on June 20, along with his deputy, after being accused of helping former NRA President Oliver North plot to overthrow Wayne LaPierre, the NRA’s longtime leader and public face. The group is also in a messy public divorce with its longtime advertising agency, Ackerman McQueen Inc., which produced NRATV and helped transform the NRA into a lobbying powerhouse and cultural force.
All told, the NRA is entering the 2020 race with Trump lagging in polls and without the marketing or lobbying power that made it such an effective force for Trump in 2016. It’s not clear who inside the NRA could take Cox’s place, and recruiting an outsider could be especially difficult because of the financial turmoil and political bloodletting roiling the group, some insiders say.
With Cox running the NRA’s political activities, the group rolled to legislative and electoral successes: the repeal of an assault weapons ban; the passage of a law barring charges against gun makers and dealers who sell firearms used in crimes; and the blocking of expanded background checks for gun buyers championed by a Democratic Congress and the Obama administration.
His lobbying was also effective at the local level. Between December 2012 and March 2018, most of the 600 new gun laws passed at the state level were backed by the NRA, according to the Pew Charitable Trusts.
Cox was the NRA operative behind Trump’s path to the White House, spending a record $30.3 million from the NRA’s political action committee to support him. When Trump spoke at NRA events, he was introduced by Cox rather than LaPierre. Cox conferred with Trump after the Parkland, Florida, school shooting set off renewed calls for gun-safety legislation, which the president briefly advocated in the wake of the attack. After Trump tweeted that he had a “great” meeting with the group, Cox announced that the president had dropped his support for such legislation.
But those successes have been drowned out in recent weeks by the NRA’s internal battles. The group filed an explosive lawsuit last week saying that Cox had betrayed LaPierre by joining North in a coup attempt. That followed accusations against LaPierre of lavish spending.
The NRA has said that LaPierre’s spending was proper. Representatives for the NRA, LaPierre and Cox didn’t have immediate comments.
Losing Cox, North and Ackerman McQueen will severely test LaPierre’s leadership. Even if the NRA rushed to set up the logistics for a successful 2020 race, the ongoing drama could harm it even further financially, said Richard Feldman, a former NRA marketing executive. “Some people are looking for an excuse not to contribute. They’ve got it,” he said.
Another former NRA consultant who spoke on the condition of anonymity said, “There’s a moment happening at NRA leadership that is disconnected from what drives NRA-centric voters.”
LaPierre drew criticism after revelations that he received $270,000 of clothes from Ackerman McQueen, the firm that produced NRATV and spent several decades creating much of the modern-day NRA brand, as well as $240,000 in travel expenses reimbursed by the gun group.
In April, the NRA sued Ackerman McQueen, claiming it didn’t provide details about an employment contract that the firm extended to North after he left Fox News to take the unpaid, ceremonial post atop the gun association. The leadership struggle came to a head on April 24, when North threatened to reveal unflattering details about LaPierre’s spending unless he resigned and supported North’s continued tenure, according to the NRA. Instead, LaPierre pushed back, and North was shoved out.
The NRA claims that Ackerman McQueen and Cox joined North in the failed coup attempt. Ackerman McQueen has countersued, and the fallout has doomed NRATV, which was produced by the firm. Late Tuesday, the NRA notified Ackerman McQueen that it was immediately terminating its contract with the firm.
The NRA won a legal victory in Virginia state court on Wednesday when a judge denied a bid by Ackerman McQueen to force the gun association to post a $3 million letter of credit. The agency sought that money to cover $1.6 million in bills it submitted to the NRA that have gone unpaid. It said it would have to furlough or lay off as many as 60 employees within a week if it couldn’t recover the money owed.
Of the three NRA leaders whose photos were prominently displayed at the group’s annual meeting in April, only LaPierre remains.
After news of Cox’s suspension became public, some gun-rights advocates expressed their anguish over the NRA’s civil war. Ammoland, a news website for gun enthusiasts, published several articles calling for LaPierre to resign. Hickok45, a father-son YouTube channel about shooting sports with 4 million followers, announced it was cutting its NRA ties altogether.
Cox’s suspension was “the last straw” for their partnership, the duo said in a video. “We need a strong NRA, we want a strong NRA, but it’s just gotten so controversial,” they said.
More than 2,000 people commented, with many expressing their own frustrations with the group. “Wayne simply has to go,” wrote the MrGunsNGears Channel, which has 340,000 subscribers. Many expressed support for Gun Owners of America, a group that’s even more conservative than the NRA. The group supports repeal of the National Firearms Act, one of the few federal laws governing gun ownership.
Given Cox’s influence and the number of favors he has curried with Republican politicians, he could open his own lobbying shop, the former NRA consultant said. “Those voters are going to be out there,” the consultant said. “They’re highly motivated. I’ve seen them in election after election come out. They’re going to coalesce very quickly, whether it’s around the NRA or not.”
Some members who have criticized the NRA say they might be able to continue their support if someone else were at the helm. “I think there comes a point when the board says, ‘To protect the NRA we have to get rid of Wayne,’” Feldman said. “I don’t know who they’d bring in, but it’d be someone who pays for his own $200,000 in suits.”
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Hedge Funds Have Never Been This Bullish On Barings BDC, Inc. (BBDC)
Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The last 8 months is one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by nearly 9 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Barings BDC, Inc. (NYSE:BBDC).
Barings BDC, Inc. (NYSE:BBDC)has seen an increase in enthusiasm from smart money lately.BBDCwas in 12 hedge funds' portfolios at the end of March. There were 10 hedge funds in our database with BBDC holdings at the end of the previous quarter. Our calculations also showed that bbdc isn't among the30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let's analyze the recent hedge fund action regarding Barings BDC, Inc. (NYSE:BBDC).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the fourth quarter of 2018. By comparison, 3 hedge funds held shares or bullish call options in BBDC a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,Clough Capital Partnerswas the largest shareholder of Barings BDC, Inc. (NYSE:BBDC), with a stake worth $4.6 million reported as of the end of March. Trailing Clough Capital Partners was Arrowstreet Capital, which amassed a stake valued at $3.2 million. McKinley Capital Management, Citadel Investment Group, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, key money managers were breaking ground themselves.Millennium Management, managed by Israel Englander, assembled the largest position in Barings BDC, Inc. (NYSE:BBDC). Millennium Management had $1.6 million invested in the company at the end of the quarter. Paul Tudor Jones'sTudor Investment Corpalso made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Matthew Hulsizer'sPEAK6 Capital Management.
Let's go over hedge fund activity in other stocks similar to Barings BDC, Inc. (NYSE:BBDC). We will take a look at Forty Seven, Inc. (NASDAQ:FTSV), Exela Technologies, Inc. (NASDAQ:XELA), American Public Education, Inc. (NASDAQ:APEI), and International Seaways, Inc. (NYSE:INSW). All of these stocks' market caps resemble BBDC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FTSV,8,28475,2 XELA,10,85307,-3 APEI,15,76344,-1 INSW,11,160250,3 Average,11,87594,0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $17 million in BBDC's case. American Public Education, Inc. (NASDAQ:APEI) is the most popular stock in this table. On the other hand Forty Seven, Inc. (NASDAQ:FTSV) is the least popular one with only 8 bullish hedge fund positions. Barings BDC, Inc. (NYSE:BBDC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on BBDC, though not to the same extent, as the stock returned 4.4% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Antares Pharma Inc (ATRS)
We at Insider Monkey have gone over 738 13F filings that hedge funds and famous value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article we look at what those investors think of Antares Pharma Inc (NASDAQ:ATRS).
IsAntares Pharma Inc (NASDAQ:ATRS)a bargain? Prominent investors are getting more bullish. The number of long hedge fund positions increased by 2 lately. Our calculations also showed that atrs isn't among the30 most popular stocks among hedge funds.ATRSwas in 12 hedge funds' portfolios at the end of March. There were 10 hedge funds in our database with ATRS holdings at the end of the previous quarter.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let's take a peek at the new hedge fund action surrounding Antares Pharma Inc (NASDAQ:ATRS).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the fourth quarter of 2018. On the other hand, there were a total of 6 hedge funds with a bullish position in ATRS a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,Armistice Capitalwas the largest shareholder of Antares Pharma Inc (NASDAQ:ATRS), with a stake worth $31.2 million reported as of the end of March. Trailing Armistice Capital was Broadfin Capital, which amassed a stake valued at $8 million. Marshall Wace LLP, Renaissance Technologies, and Two Sigma Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness.Renaissance Technologies, managed by Jim Simons, assembled the largest position in Antares Pharma Inc (NASDAQ:ATRS). Renaissance Technologies had $1.3 million invested in the company at the end of the quarter. William Harnisch'sPeconic Partners LLCalso made a $0.2 million investment in the stock during the quarter. The other funds with brand new ATRS positions are David Harding'sWinton Capital Managementand Ken Griffin'sCitadel Investment Group.
Let's now take a look at hedge fund activity in other stocks similar to Antares Pharma Inc (NASDAQ:ATRS). These stocks are CONSOL Coal Resources LP (NYSE:CCR), SIGA Technologies Inc. (NASDAQ:SIGA), CytomX Therapeutics, Inc. (NASDAQ:CTMX), and Prothena Corporation plc (NASDAQ:PRTA). This group of stocks' market valuations are closest to ATRS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CCR,5,102709,0 SIGA,16,30174,6 CTMX,18,92527,1 PRTA,22,242026,9 Average,15.25,116859,4 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $47 million in ATRS's case. Prothena Corporation plc (NASDAQ:PRTA) is the most popular stock in this table. On the other hand CONSOL Coal Resources LP (NYSE:CCR) is the least popular one with only 5 bullish hedge fund positions. Antares Pharma Inc (NASDAQ:ATRS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ATRS wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ATRS investors were disappointed as the stock returned -0.7% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Cincinnati Bell Inc. (CBB)
Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors' favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the second quarter. The stats were even worse in recent years when most of the advances in the market were due to large gains by FAANG stocks. However, one bright side for individual investors was the strong performance of hedge funds' top consensus picks. This year hedge funds' top 20 stock picks outperformed the S&P 500 Index by 6.6 percentage points through May 30th. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Hedge fund interest inCincinnati Bell Inc. (NYSE:CBB)shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Ashford Hospitality Trust, Inc. (NYSE:AHT), Whitestone REIT (NYSE:WSR), and Arvinas, Inc. (NASDAQ:ARVN) to gather more data points.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_30576" align="aligncenter" width="501"]
Glenn Russell Dubin of Highbridge Capital[/caption]
We're going to take a peek at the latest hedge fund action surrounding Cincinnati Bell Inc. (NYSE:CBB).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2018. By comparison, 14 hedge funds held shares or bullish call options in CBB a year ago. With hedgies' capital changing hands, there exists a few notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Mario Gabelli'sGAMCO Investorshas the largest position in Cincinnati Bell Inc. (NYSE:CBB), worth close to $20.4 million, accounting for 0.2% of its total 13F portfolio. Coming in second is D. E. Shaw ofD E Shaw, with a $5.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism comprise Israel Englander'sMillennium Management, Noam Gottesman'sGLG Partnersand Glenn Russell Dubin'sHighbridge Capital Management.
Seeing as Cincinnati Bell Inc. (NYSE:CBB) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there lies a certain "tier" of hedge funds who sold off their positions entirely heading into Q3. Interestingly, William C. Martin'sRaging Capital Managementdumped the biggest stake of all the hedgies followed by Insider Monkey, comprising an estimated $7.3 million in stock, and Ric Dillon's Diamond Hill Capital was right behind this move, as the fund cut about $3.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Cincinnati Bell Inc. (NYSE:CBB) but similarly valued. These stocks are Ashford Hospitality Trust, Inc. (NYSE:AHT), Whitestone REIT (NYSE:WSR), Arvinas, Inc. (NASDAQ:ARVN), and PDL BioPharma Inc. (NASDAQ:PDLI). This group of stocks' market caps are closest to CBB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AHT,9,39576,-6 WSR,5,16825,-1 ARVN,14,104327,0 PDLI,18,83457,2 Average,11.5,61046,-1.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $38 million in CBB's case. PDL BioPharma Inc. (NASDAQ:PDLI) is the most popular stock in this table. On the other hand Whitestone REIT (NYSE:WSR) is the least popular one with only 5 bullish hedge fund positions. Cincinnati Bell Inc. (NYSE:CBB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CBB wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CBB were disappointed as the stock returned -44.2% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Spark New Zealand Limited (NZSE:SPK) A High Quality Stock To Own?
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. To keep the lesson grounded in practicality, we'll use ROE to better understand Spark New Zealand Limited (NZSE:SPK).
Our data showsSpark New Zealand has a return on equity of 25%for the last year. That means that for every NZ$1 worth of shareholders' equity, it generated NZ$0.25 in profit.
See our latest analysis for Spark New Zealand
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Spark New Zealand:
25% = NZ$376m ÷ NZ$1.5b (Based on the trailing twelve months to December 2018.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is the capital paid in by shareholders, plus any retained earnings. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the yearly profit. A higher profit will lead to a higher ROE. So, as a general rule,a high ROE is a good thing. That means it can be interesting to compare the ROE of different companies.
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As is clear from the image below, Spark New Zealand has a better ROE than the average (8.8%) in the Telecom industry.
That's clearly a positive. In my book, a high ROE almost always warrants a closer look. One data point to check is ifinsiders have bought shares recently.
Most companies need money -- from somewhere -- to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Although Spark New Zealand does use debt, its debt to equity ratio of 0.99 is still low. When I see a high ROE, fuelled by only modest debt, I suspect the business is high quality. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to check this FREEvisualization of analyst forecasts for the company.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
3 Blue-Chip Technology Stocks to Buy to Close Out June
Last week, the S&P 500 climbed to its first record close since April as Wall Street turned more bullish on the likelihood that the Fed will cut interest rates this year. Meanwhile, investors once again seem somewhat hopeful that an end to the prolonged U.S.-China trade war might be near.
The S&P is up roughly 15% in 2019, with the likes of large-cap tech powers such as Netflix NFLX, Apple AAPL, and Amazon AMZN helping lift the index. Despite continued uncertainty between the world’s two largest economies and a downturn in chip markets, technology companies look set to be long-term winners.
With that said, let’s check out three blue-chip tech stocks to consider buying right now…
1. Intuit Inc. INTU
Intuit, which boasts a market cap of $67 billion, offers a variety of financial services geared toward taxes, small business money management, and personal finance. Intuit’s core software-as-a-service products include QuickBooks and TurboTax. The Mountain View, California-based company posted better-than-projected third quarter fiscal 2019 results in late May and raised its full-year guidance. Shares of Intuit have also jumped 31% in 2019 and 150% over the past three years, which blows away the S&P’s 46% climb.
Our current Zacks Consensus Estimates call for the company’s adjusted full-year earnings to climb 19.4% on the back of 13.2% revenue growth. Peeking ahead to next year, Intuit’s EPS figure is expected to climb roughly 13% higher than our current year estimate, with revenue projected to jump 9.5% above 2019 to reach $7.42 billion. INTU’s longer-term earnings estimate revision activity has turned far more positive recently to help it earn a Zacks Rank #2 (Buy) right now. And the tax-focused SaaS firm is a dividend payer that raised its payout by 21% this year.
2. Facebook FB
Facebook officially announced last week its hard asset-backed, blockchain-based cryptocurrency offering called Libra. Mark Zuckerberg’s firm, which partnered with Uber UBER, Spotify SPOT, Mastercard MA, and PayPal PYPL, seems set to make good on its promise to diversify amid continued backlash. Despite all of the negative headlines and increased government scrutiny, the social media giant’s core business model has remained strong, with both its daily and monthly active users up 8% last quarter. In fact, over 2.7 billion people use at least one of its “family” of services—which includes Facebook, Instagram, WhatsApp, and Messenger—every month on average. This number alone is one that should keep FB a money-making machine for years to come.
Going forward, FB hopes to expand its e-commerce reach and get back to its original goal to connect family and friends. Looking ahead, FB’s full-year 2019 revenue is expected to climb 24% to reach $69.22 billion, with 2020’s figure projected to pop 21% higher to $83.87 billion. Facebook’s adjusted full-year earnings are projected to slip 6.3% this year as it spends heavily on expansion and security. Despite the expected near-term downturn, Facebook’s 2020 EPS figure is projected to soar 31% above our 2019 estimate. Shares of FB have surged 44% in 2019, yet still rest 14% below their 52-week high of $218.62 per share. FB is a Zacks Rank #2 (Buy) at the moment and is trading at 21.9X forward 12-month Zacks Consensus EPS estimates. This marks a discount compared to its industry’s 26.9X average and its own three-year high of 37X and 27.1X median.
3. Cisco Systems, Inc. CSCO
Like its blue-chip tech peers, Cisco stock is up big in 2019, 32% to be exact. Shares of CSCO opened Wednesday at $56.54 per share, just off their 52-week week highs of $58.15. The historic networking power in recent years has expanded its IoT business. Cisco offers clients the ability to connect everything from transportation fleets to assembly lines in order to run their operations more efficiently. And the firm is coming off a better-than-projected Q3. Looking ahead, Cisco’s adjusted Q4 fiscal 2019 EPS figure is projected to jump 17% on 4.2% higher revenue. This growth is expected to help lift full-year earnings by 18.5% and revenue by 5.1%.
Plus, the company’s bottom line is expected to jump 11.3% above our current year estimate in fiscal 2020, with revenues projected to climb 3.7% higher to reach $53.79 billion. Along with this expected counited expansion, CSCO has seen its earnings estimate revision activity trend heavily in the right direction recently, especially for fiscal 2019 and 2020, to help Cisco land a Zacks Rank #2 (Buy). Cisco is also a dividend payer that sports a 2.5% yield at the moment.
More Stock News: This Is Bigger than the iPhone!It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportCisco Systems, Inc. (CSCO) : Free Stock Analysis ReportNetflix, Inc. (NFLX) : Free Stock Analysis ReportAmazon.com, Inc. (AMZN) : Free Stock Analysis ReportFacebook, Inc. (FB) : Free Stock Analysis ReportPayPal Holdings, Inc. (PYPL) : Free Stock Analysis ReportApple Inc. (AAPL) : Free Stock Analysis ReportIntuit Inc. (INTU) : Free Stock Analysis ReportMastercard Incorporated (MA) : Free Stock Analysis ReportSpotify Technology SA (SPOT) : Free Stock Analysis ReportUber Technologies, Inc. (UBER) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
John Boyega and Letitia Wright to star in Steve McQueen's upcoming BBC anthology series Small Axe
Steve McQueen is taking John Boyega and Letitia Wright with him to the small screen. The Oscar-winning 12 Years a Slave director is creating an anthology series called Small Axe that will tell five different stories about Londons West Indian community that span the late 1960s to the early 1980s. Disney film favorites Boyega and Wright will be joined by actors Malachi Kirby ( Black Mirror ), Jack Lowden ( Dunkirk ), Shaun Parkes ( Lost in Space ), Rochenda Sandall ( Line of Duty ), and Alex Jennings ( The Crown ). The title comes from a Jamaican proverb that says If you are the big tree, we are the small axe. It also happens to be the title of one of Bob Marleys songs on the album Catch a Fire . Executive producer McQueen conceived the project with Alastair Siddons (Tomb Raider ) and newcomer Courttia Newland. Additionally, novelist Alex Wheatle will be a writing consultant on the show. Production for Small Axe has already begun in London with plans for the six-part series to air on BBC, and be distributed to the United States through Amazon Prime Video. Related content: New image of Rey, Finn, and Poe revealed as Star Wars: Episode IX wraps filming John Boyega wants to make an Attack the Block sequel John Boyega and Letitia Wright will Hold Back the Stars for indie sci-fi romance |
A Look At The Intrinsic Value Of Support.com, Inc. (NASDAQ:SPRT)
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How far off is Support.com, Inc. (NASDAQ:SPRT) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to today's value. This is done using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
See our latest analysis for Support.com
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF ($, Millions)", "2019": "$0.50", "2020": "$0.79", "2021": "$1.12", "2022": "$1.46", "2023": "$1.78", "2024": "$2.06", "2025": "$2.31", "2026": "$2.53", "2027": "$2.71", "2028": "$2.88"}, {"": "Growth Rate Estimate Source", "2019": "Est @ 82.35%", "2020": "Est @ 58.46%", "2021": "Est @ 41.74%", "2022": "Est @ 30.04%", "2023": "Est @ 21.85%", "2024": "Est @ 16.11%", "2025": "Est @ 12.1%", "2026": "Est @ 9.29%", "2027": "Est @ 7.32%", "2028": "Est @ 5.94%"}, {"": "Present Value ($, Millions) Discounted @ 9.26%", "2019": "$0.46", "2020": "$0.66", "2021": "$0.86", "2022": "$1.02", "2023": "$1.14", "2024": "$1.21", "2025": "$1.24", "2026": "$1.24", "2027": "$1.22", "2028": "$1.19"}]
Present Value of 10-year Cash Flow (PVCF)= $10.26m
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 2.7%. We discount the terminal cash flows to today's value at a cost of equity of 9.3%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$2.9m × (1 + 2.7%) ÷ (9.3% – 2.7%) = US$45m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$45m ÷ ( 1 + 9.3%)10= $18.65m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is $28.90m. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of $1.52. Relative to the current share price of $1.57, the company appears around fair value at the time of writing. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Support.com as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.3%, which is based on a levered beta of 1.096. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Although the valuation of a company is important, it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Support.com, There are three important factors you should further examine:
1. Financial Health: Does SPRT have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of SPRT? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every US stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
PHOTOS: Moon rock samples sealed since Apollo missions
Collected during Apollo 17, a 3.5 billion year old basalt rock known as "The Children of the World" or "The Goodwill Sample" is displayed in the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. It was used for to make samples that were gifted to every country on earth. (Photo: Michael Wyke/AP) Inside a locked vault at Johnson Space Center is treasure few have seen and fewer have touched. The restricted lab is home to hundreds of pounds of moon rocks collected by Apollo astronauts close to a half-century ago. And for the first time in decades, NASA is about to open some of the pristine samples and let geologists take a crack at them with 21st-century technology. What better way to mark this summer's 50th anniversary of humanity's first footsteps on the moon than by sharing a bit of the lunar loot. With the golden anniversary of Neil Armstrong and Buzz Aldrin's feat fast approaching — their lunar module Eagle landed July 20, 1969, on the Sea of Tranquility — the moon is red-hot again. After decades of flip-flopping between the moon and Mars as the next big astronaut destination, NASA aims to put astronauts on the lunar surface again by 2024 at the White House's direction. President Donald Trump prefers talking up Mars. But the consensus is that the moon is a crucial proving ground given its relative proximity to home — 240,000 miles (386,000 kilometers) or two to three days away. (AP) See more news-related photo galleries and follow us on Yahoo News Photo Twitter and Tumblr . A stainless steel bin is opened to show individually tagged and sealed lunar samples collected during Apollo 16 inside a pressurized nitrogen-filled case holding the samples from that mission in the lunar lab of the NASA Johnson Space Center Monday, June 17, 2019, in Houston. (Photo: Michael Wyke/AP) Ryan Zeigler, Apollo sample curator, left, stands next to a nitrogen-filled case displaying various lunar samples collected during Apollo missions 15, 16 and 17, inside the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. (Photo: Michael Wyke/AP) A regolith breccia rock of sintered lunar soil, dating 3.2 billion years old and collected by Apollo 15, is displayed in a pressurized nitrogen-filled case inside the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. (Photo: Michael Wyke/AP) Lacey Costello, Apollo sample curation processor, talks about her job examining lunar samples inside the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. (Photo: Michael Wyke/AP) Collected during Apollo 15, a 3.5 billion years old basalt rock similar to rocks formed around Hawaii, is displayed in a pressurized nitrogen-filled examination case inside the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. For the first time in decades, NASA is about to open some of the pristine samples and let geologists take a crack at them with 21st-century technology. (Photo: Michael Wyke/AP) Jeremy Kent, Apollo curation processor, works with lunar samples within a sealed, nitrogen-pressurized examination case inside the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. The samples are always kept inside a nitrogen environment to prevent decay and degradation, even as they are moved between the lab and the storage vault. (Photo: Michael Wyke/AP) Two separate 2 inch foil pans hold lunar dirt, from the last shovel full collected by Neil Armstrong on the Apollo 11, in the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. (Photo: Michael Wyke/AP) Jeremy Kent, Apollo sample curation processor, tugs to open the 1978 U.S. federal bank vault that protects the entrance to the lunar sample vault inside the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. The door requires two separate combinations, held by two separate people, to open. (Photo: Michael Wyke/AP) Collected during Apollo 16, an anorthosite sample believed to be the oldest rock collected during the moon missions is displayed in the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. Scientists also believe it to be from the original crust of the moon just after it cooled. (Photo: Michael Wyke/AP) The Genesis Rock, foreground, a 4.4 billion year old anorthosite rock, approximately 2 inches in length, brought back by Apollo 15 and used to determine the moon was formed by a giant impact, sits under glass inside a pressurized nitrogen-filled examination case as Lacey Costello, an Apollo sample curation processor, works with other samples on the outside of the case inside the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. (Photo: Michael Wyke/AP) The "Genesis Rock," a 4.4 billion-year-old anorthosite sample approximately 2 inches in length, brought back by Apollo 15 and used to determine the moon was formed by a giant impact, is lit inside a pressurized nitrogen-filled examination case in the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. (Photo: Michael Wyke/AP) Pressurized nitrogen-filled cases hold lunar samples collected from Apollo 11, left, and Apollo 12, right, with NASA's Apollo sample curator Ryan Zeigler in the background, inside the lunar sample vault in the lunar lab at the NASA Johnson Space Center Monday, June 17, 2019, in Houston. The restricted lab is home to hundreds of pounds of moon rocks collected by Apollo astronauts close to a half-century ago. (Photo: Michael Wyke/AP) _____ Read more from Yahoo News: Former top U.S. diplomat deplores policy toward Iran 'untethered to any coherent strategy' Pentagon secretly struck back against Iranian cyberspies targeting U.S. ships Trump admits his Cabinet had 'some clinkers' For Dems, there's no chickening out at Clyburn's fish fry Chore wars: Are men doing enough housework? PHOTOS: They fled Venezuela's crisis by boat — then vanished |
Minera Alamos Announces Definitive Agreements Executed for Assignment of Guadalupe De Los Reyes Gold Project Option to Epower Metals
Toronto, Ontario and Vancouver, British Columbia--(Newsfile Corp. - June 26, 2019) -Minera Alamos Inc.(TSXV: MAI)("Minera Alamos" or the "Company")is pleased to announced that it has entered into a definitive assignment and assumption agreement (the "Assignment Agreement"), dated June 25th, 2019, with ePower Metals Inc. ("ePower"), Vista Gold Corp. ("Vista Gold"), and the Mexican subsidiaries of each of ePower and the Company, pursuant to which the Company will assign the rights to an option (the "Transaction") to earn a 100% interest in the Guadalupe de los Reyes ("Guadalupe") gold project in Sinaloa State, Mexico. Minera Alamos currently has the right to acquire a 100% interest in Guadalupe, pursuant to an option agreement entered into with Vista Gold. The Assignment Agreement replaces the previously announced binding letter of intent entered into between the Company and ePower effective April 22, 2019.
Terms of the Transaction
To acquire the Company's interest in Guadalupe, ePower must:
• Complete a cash payment of US$1,500,000 ("Deposit") to Minera Alamos, to reimburse the cost of an option payment made to Vista Gold on April 23, 2019 (the "April Payment").
• Assume the Company's remaining payments of US$3,000,000 in favour of Vista Gold (collectively, the "Payments"), as follows:
• US$1,500,000 due October 27th, 2019; and
• US$1,500,000 on the earlier of October 27th, 2021 or a production decision.
• Issue to Minera Alamos 9,450,000 post-Consolidation (as defined below) common shares and 3,350,000 common share purchase warrants entitling Minera Alamos to acquire an equal number of post-Consolidation common shares at a price $0.50 per share for a period of twenty-four months.
Concurrently with the entering into of the Assignment Agreement, the ePower has entered into a governance and investor rights agreement (the "Governance Agreement") with Minera Alamos. The Governance Agreement, provides, among other things that Minera Alamos will receive the right to: (i) upon completion of the Transaction, appoint one director to the board of ePower for so long as the Minera Alamos holds at least 5% of ePower's outstanding common shares, and (ii) to participate in future financings and transactions completed by ePower in order to maintain its pro rata equity interest in ePower. Upon completion of the Transaction, it is anticipated that Bruce Durham will join the ePower's board of directors as Minera Alamos' initial nominee under the Governance Agreement.
In order to finance the Deposit, ePower has entered into a loan agreement for Cdn$2,000,000 which was previously arranged through a group of arm's-length lenders consisting of Andrew Bowering, George Dengin and Perfect Storm Holdings Ltd. (the "Lenders"). In the event the Assignment Agreement is terminated, Minera Alamos will have no obligation whatsoever to ePower in respect of the Deposit and the Deposit will, subject to receipt of all require approvals, including, the approval of the TSX Venture Exchange, form the basis of a private placement investment by the Lenders in common shares of Minera Alamos.
Completion of the Transaction is subject to a number of conditions, which include:
• ePower consolidating its common share capital on a two-for-one basis (the "Consolidation");
• ePower completing a financing of at least Cdn$6,000,000; and
• Receipt of any required regulatory approvals, including the approval of the Exchange.
The Transaction cannot be completed until these conditions have been satisfied, and there can be no assurance that the Transaction will be completed in a timely fashion, or at all.
All securities of the ePower to be issued to Minera Alamos in connection with the Transaction, will be subject to a four month statutory hold period.
Minera Alamos looks forward to supporting ePower's activities and the development of Guadalupe moving forward.
For Further Information Please Contact:
Minera Alamos Inc.
Doug Ramshaw, PresidentTel: 604-600-4423Email:dramshaw@mineraalamos.com
Darren Koningen, CEOTel: 416-306-0990Email:dkoningen@mineraalamos.com
Website:www.mineraalamos.com
About Minera Alamos
Minera Alamos is an advanced-stage exploration and development company with a portfolio of high-quality Mexican assets, including the La Fortuna open-pit gold project in Durango on which a positive Preliminary Economic Assessment has been completed and the Santana open-pit heap-leach development project in Sonora with test mining and processing completed. The Company is awaiting the pending approval of permit applications related to the commercial production of gold at both the Santana and Fortuna projects.
The Company's strategy is to develop low capex assets while expanding the project's resources and concurrently pursuing complementary strategic acquisitions.
Mr. Darren Koningen, P. Eng., Minera Alamos' CEO, is the Qualified Person responsible for the technical content of this press release under National Instrument 43-101. Mr. Koningen has supervised the preparation of, and approved the scientific and technical disclosures in this news release.
Caution Regarding Forward-Looking Statements
This news release may contain forward-looking information and Minera Alamos cautions readers that forward-looking information is based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of Minera Alamos included in this news release. This news release includes certain "forward-looking statements", which often, but not always, can be identified by the use of words such as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". These statements are based on information currently available to Minera Alamos and Minera Alamos provides no assurance that actual results will meet management's expectations. Forward-looking statements include estimates and statements with respect to Minera Alamos' future plans with respect to the Projects, objectives or goals, to the effect that Minera Alamos or management expects a stated condition or result to occur and the expected timing for release of a resource or reserve estimate on the Projects. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, closing of the Transaction could differ materially from those currently anticipated in such statements These and other factors should be considered carefully and readers should not place undue reliance on Minera Alamos' forward-looking statements. Minera Alamos does not undertake to update any forward-looking statement that may be made from time to time by Minera Alamos or on its behalf, except in accordance with applicable securities laws.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
To view the source version of this press release, please visithttps://www.newsfilecorp.com/release/45919 |
Zynga celebrates Farmville's 10th anniversary
Sarah LeBoeuf,Wed, 26 Jun 2019 18:14:00
The summer of 2009 was a much different time. The iPhone was only two years old, and smartphones hadn't quite caught on; many of us were still rocking flip phones. We weren’t talking to our speakers, doorbells, and fridges, either. The Xbox 360 and PS3 were battling it out for console domination, but they couldn’t match the Wii’s sales, which had blasted into the stratosphere. And because we weren’t constantly glued to our phone screens, the free-to-play marketplace had a different home: Facebook.
In June 2009, an unassuming game about growing crops launched on Facebook, which was a hub of casual games back then. This was, of course,FarmVille, which went on to amass millions of daily active users.FarmVillewas far from the first in the farming sim genre, popularized years earlier with games likeHarvest Moon, but its platform allowed Zynga to incorporate social aspects that encouraged you to interact with your Facebook friends.
To celebrate the anniversary of its first big title, Zynga announced an unlikely collaboration with country singer Trisha Yearwood, a self-professed player, to bring original content to the spin-offFarmVille 2: Country Escape.
“So much has happened in the last decade, across technology, entertainment, and attitudes,” Yearwood said in a press release. “But there are shared experiences that endure and bring people together, like those special songs that become anthems or a powerhouse game likeFarmVille.”
Of course, it wasn’t all smooth sailing for Zynga over the last decade. AfterFarmVille, the market was flooded with F2P social games, many of them from Zynga itself. In 2012, the same yearFarmVille 2launched,Zynga’s value crashed, losing $10 billion in market value in a year. A series of game flops, unsuccessful studio acquisitions, and fleeing talent didn’t help the situation.
It took years for Zynga to rebuild after that disastrous period, but as of 2019, it’s clawed its wayback to the top, postingrecord-breaking earningsfor Q1 2019. The freemium model has changed a lot since those early farming days; now we have full-fledged console and PC multiplayer games likeFortniteraking in millions while being free to download.
Though the marketplace has evolved, Zynga hasn’t forgotten its roots. “FarmVilleis a cultural phenomenon and an important contributor to the growth of games,” President of Publishing Bernard Kim stated. “It brought together hundreds of millions of players from all over the world.”
In addition to Trisha Yearwood-branded content, Zynga has announced that they have a new mobile title in the works. In an industry where we’ve seentoomanystudiosshut down in recent years, Zynga’s turnaround is certainly refreshing.
Updated 6/26/2019
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• Indie developers attribute mass wishlist deletions to Steam Summer Sale [Update]
• Sega is letting other companies take the big risks on streaming and subscription services |
Boasting A 25% Return On Equity, Is Spark New Zealand Limited (NZSE:SPK) A Top Quality Stock?
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Spark New Zealand Limited (NZSE:SPK).
Our data showsSpark New Zealand has a return on equity of 25%for the last year. Another way to think of that is that for every NZ$1 worth of equity in the company, it was able to earn NZ$0.25.
See our latest analysis for Spark New Zealand
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Spark New Zealand:
25% = NZ$376m ÷ NZ$1.5b (Based on the trailing twelve months to December 2018.)
Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. It is the capital paid in by shareholders, plus any retained earnings. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the yearly profit. The higher the ROE, the more profit the company is making. So, all else being equal,a high ROE is better than a low one. That means ROE can be used to compare two businesses.
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. Pleasingly, Spark New Zealand has a superior ROE than the average (8.8%) company in the Telecom industry.
That's clearly a positive. I usually take a closer look when a company has a better ROE than industry peers. For example,I often check if insiders have been buying shares.
Companies usually need to invest money to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the use of debt will improve the returns, but will not change the equity. That will make the ROE look better than if no debt was used.
While Spark New Zealand does have some debt, with debt to equity of just 0.99, we wouldn't say debt is excessive. When I see a high ROE, fuelled by only modest debt, I suspect the business is high quality. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. Companies that can achieve high returns on equity without too much debt are generally of good quality. All else being equal, a higher ROE is better.
But when a business is high quality, the market often bids it up to a price that reflects this. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So I think it may be worth checking thisfreereport on analyst forecasts for the company.
Of courseSpark New Zealand may not be the best stock to buy. So you may wish to see thisfreecollection of other companies that have high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How Trump's Rule on Hospital Prices Could Help Consumers
Consumer Reports has no financial relationship with advertisers on this site. Consumer Reports has no financial relationship with advertisers on this site. Citing instances where patients paid $6,000 for saline solution and $17,000 for stitches, President Donald Trump this week signed an executive order that would require hospitals to make the cash price of a medical service or procedure available to a consumer beforehand in an easy-to-read format. For too long, its been virtually impossible for Americans to know the real price and quality of healthcare services and the services they receive, Trump said during the signing ceremony. As a result, patients face significant obstacles shopping for the best care at the best price, driving up healthcare costs for everyone. The executive order is short on some key details, such as exactly which medical services the rule would apply to and when it would take effect. Instead, the order directs the Health and Human Services department to draft rules and work through the public-comment process before any action is finalized. On previous similar executive actions, it has taken up to a year before rules were enacted. This step is the most recent of several measures from the Trump administration meant to increase price transparency in medical care and to lower healthcare prices. Last October, Trump signed bills that ended the gag clauses in pharmacy contracts that prohibited pharmacists from volunteering a lower cash price when it was cheaper than a consumers insurance. And starting in early July, drug companies will be required to include the price of drugs in their TV advertising. Some experts believe those measures may not do much, if anything, to lower healthcare costs , and some even say this latest move could cause some costs to rise. Publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices highernot lowerfor consumers, patients, and taxpayers, Matt Eyles, president and CEO of industry group Americas Health Insurance Plans, said in a statement. Others point out that in many situationssuch as emergency care , or for complicated health problemsmost people dont have the opportunity to shop, so knowing the cost in advance wont help much. Still, making healthcare easier to access and understand for consumers is potentially helpful, Surgeon General Jerome Adams, M.D., told CR at the Aspen Ideas Festival this week. And, he notes, many Americans need help managing medical costs, which, he says, can bankrupt almost anyone. Story continues Even as experts debate whether knowing the price of a procedure or cost of an MRI ahead of time will ultimately lower the cost of healthcare in this country, there may be some instances when knowing that information can help you. Here are four of them: 1. If You Have a High-Deductible Insurance Plan and Need to Shop Around Just over 40 percent of Americans have a health insurance plan that requires them to pay a minimum of $1,300 out of pocket for an individual and $2,600 for a family before their benefits kick in, according to the Centers for Disease Control and Prevention. If this describes your situation and you need to pay for a medical service but have not yet reached your deductible, shopping around for your healthcare, when possible, could reduce your costs. Thats because you could find that healthcare providers in the same area charge different amounts for the same procedure or test. For example, a 2019 RAND Corporation study found, among other things, that costs could vary for the same procedure among several hospitals. In the Indianapolis area, an endoscopy could cost $169 at Eskenazi Health or $233 at nearby Franciscan Health. Another example: The standard cost for an inpatient childbirth at Medical Center of the Rockies in Loveland, Colo., is $17,505. But just a few miles away at Banner Fort Collins Medical Center, inpatient childbirth would cost $10,415, according to RANDs report. To be sure, this sort of comparison shopping in healthcare applies only to about 7 percent of the nations healthcare spending, which is nonurgent, out-of-pocket, and shoppable by consumers, says Chuck Bell, program director at Consumer Reports, who has studied this topic. 2. When You Go Out of Network and Have to Pay More Out of Pocket Consumers who use out-of-network services could be billed at rates three to five times higher than negotiated rates that insurers pay for in-network care, says CRs Bell. Uninsured patients could be charged even higher rates, and have to cover the entire cost out of pocket, he notes. You could have an easier time with determining prices on services that are clear-cut, says Stephen Buck, a healthcare and drug industry consultant with expertise in price transparency. He cites that finding out the cost of an MRI, lab tests, or standard office visits as examples. But for more complicated treatments for conditions such as a stroke or heart attack , or any unplanned hospitalization, Buck says, it could be much more difficult to obtain prices in advance or compare prices among service providers. 3. If Knowing the Cost of a Procedure Would Help You Make a Decision About It When Anne Maxfield, who runs the website Accidental Locavore in Poughkeepsie, N.Y., developed a cyst on her finger, her physician wanted her to get an MRI. But because Maxfield had not yet reached her plans annual $4,000 deductible and she would have to pay the cost of the MRI herself, she investigated how much it would run. I wanted to know what I might be looking at in terms of a copay for the procedure, she says. But it wasnt easy to get a clear answer. I called the doctors office and then the radiologist, and no one had a clue. They sent me to billing. So when she learned the cost of the MRI would be more than $4,000, Maxfield went back to her doctor and questioned the need for it. In the end, they decided shed wait to see if the lump changed or if it really began to bother her. What stopped me was getting sucked into big copay bills for a minor injury. While this worked for Maxfield, some experts believe in certain cases, knowing the cost of treatment could delay a person from getting needed care. Healthcare is already a very complex topic, says Julie OBrien, a principle at the Center for Advanced Hindsight at Duke University, who studies behavioral economics in healthcare. Introducing additional facts about a decision may lead to decision paralysis, causing people to disengage or possibly delay decisions, she says. Whats more, whether a consumer gets a treatment could be affected if people focus only on the short-term cost without considering the long-term benefit, OBrien says. Takings steps like Maxfield did with her doctor, where the two of them discussed the cost and the benefit of having the MRI scan, and decided together to hold off for now, may help prevent that problem. 4. When You've Received a Surprise Bill and Need to Negotiate After the Fact A 2018 nationally representative survey of more than 2,000 adult Americans who have health insurance by Consumer Reports found that 27 percent had received at least one surprise medical bill or a higher-than-expected medical charge in the last 24 months. Of those, 29 percent said they were charged more than they expected for a procedure that was preauthorized by their insurance; 12 percent said they were charged an out-of-network rate when they expected the charge to be in-network. In these instances, Bell at CR says if Trump's executive order was fully implemented, consumers could negotiate for lower prices for surprise bills if they had better access to the actual prices insurers pay. More from Consumer Reports: Top pick tires for 2016 Best used cars for $25,000 and less 7 best mattresses for couples Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2019, Consumer Reports, Inc. View comments |
Blaming Donald Trump for the deaths of Alberto Martínez Ramírez and his daughter is a lazy cop out: we all bear responsibility
Everybody’s circumstances are different , but they’re essentially also all the same . A migrant may be coming from Honduras , they may be from El Salvador . They may have paid $5,000 to a coyote to smuggle them illegally, or walked hundreds of miles with a caravan, and requested asylum at an entry port at the border. They may be seeking a job that pays decently. They may be seeking to escape gang violence, or else a fungal blight that has destroyed their coffee growing business, already rocked by globally low prices. The details differ, but one things unites the hundreds of thousands of Central Americans seeking to enter the United States - they want a better life, and they are prepared to risk everything to get one. The terrible consequences of when such efforts go bad is etched in the bleaker-than-bleak image of Alberto Martínez Ramírez, 26, and his 23-month-old daughter, Valeria, photographed by a Mexican journalist, face down and dead in the Rio Grande, after being swept away while trying to enter the US at Brownsville, Texas, from Matamoros, Mexico. They came from a neighbourhood in the east of San Salvador and their deaths were watched by Tania Vanessa Avalos, the man’s husband and the little’s girls’ mother. People have pored over the images with an intensity that feels almost pornographic, trying even to ascertain the little girl’s final moments from where her hand eventually came to rest. But there may be little to learn from this images; every year, countless numbers of migrants from Central America perish trying to enter the US, joined increasingly by large number from Africa and Asia. This month, a six-year-old girl, Gurpreet Kaur, originally from India’s Punjab, died in the desert west of Lukeville, Arizona, after her mother left her with the group of migrants they were with to go in search of water. A 2012 study published in Social Work, by the Oxford University Press, suggested at least 5,000 people died in the Sonoran desert alone since 1994, often in the most remote places. Most of the time we don’t see those bodies, bleached and turned into dust, as they are, by the heat and wind of the landscape. Story continues In the hours since the photograph of Mr Ramírez and his daughter went viral, plenty have been quick to blame Donald Trump for their deaths. “Trump is responsible for these deaths,” said Beto O’Rourke, one of the Democrats seeking the 2020 Democratic presidential nomination. “As his administration refuses to follow our laws – preventing refugees from presenting themselves for asylum at our ports of entry – they cause families to cross between ports, ensuring greater suffering and death.” Kamala Harris, another 2020 hopeful, struck a similar tone. “These families are often fleeing extreme violence,” she said. “And what happens when they arrive? Trump says ‘Go back to where you came from.’ That is inhumane.” The immigration crisis at the US-Mexico border, as that with any mass movement of people, is complicated. But several points stand out. Trump, with his racist rhetoric and threats to break up families, is on record as making it as plain as day migrants from Central America will not be welcomed into the country simply by making it to the border. You can loathe his language, you may loathe his policies, but you cannot say he is not consistent. At the same time, people continue to come, in their hundreds of thousands. When The Independent spoke to migrants in southern Mexico last year who had joined the caravan, and more recently in Honduras, where the caravan had originated, they were in no doubt as to Trump’s attitude towards them. They knew his views, yet they pressed on, often with little more than a belief that God would help them. They also knew the value of taking their child with them, aware of the controversy that erupted after Trump last year ordered all illegal migrants to be criminally charged, resulting in hundreds or thousands of families being split. In the mountains near Honduras’ border with Guatemala, the first step on the journey north, there are villages with barely any men or boys, just mothers, their daughters, and the elderly. “We know a child is like a visa,” one woman said. Since 2015, the number of Mexicans leaving the US and returning home, has been greater than the number entering. Tougher enforcement is one reason, as was the cooling of the US economy. But as Mexico’s economy has steadily grown - it is now considered an upper middle-income nation - attitudes in Mexico about whether life is better there or in the US, have shifted. The same is not yet true for Honduras, Guatemala and El Salvador, still recovering from decades of civil war (in which Washington invariably sided with the military-backed right wing governments) and massive corruption linked to the drugs trade to supply the US market. Unemployment remains high, and good jobs very few. When speaking to young Honduran students last month, all said they would rather live and work in their own country than being forced to look for opportunities in the US. The solution, said business leaders and entrepreneurs, was more foreign investment and job creation. One said: “Honduras is also part of the Americas. We want the American dream to happen here too.” It is perhaps no surprise, the people of El Salvador recently elected Nayib Bukele, who campaigned on a platform of fighting corruption and creating jobs, as their president. Here Trump should certainly take some blame. This month he cut $550m in aid to Guatamala, El Salvador and Honduras as a “punishment” for their citizens. It is likely to make the problem worse. The final, obvious, point is that nobody smuggles themselves into the US from Canada in search of a low-level job; they have no need to. There is no easy fix to any of this. But until the citizens of Central America have no need to risk everything to head north in search of a better life, there will be more deaths, more bodies. More photographs like this one. |
Is DSP Group, Inc.'s (NASDAQ:DSPG) CEO Overpaid Relative To Its Peers?
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In 2009 Ofer Elyakim was appointed CEO of DSP Group, Inc. (NASDAQ:DSPG). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for DSP Group
According to our data, DSP Group, Inc. has a market capitalization of US$321m, and pays its CEO total annual compensation worth US$1.4m. (This number is for the twelve months until December 2018). That's a fairly small increase of 0.02% on year before. While we always look at total compensation first, we note that the salary component is less, at US$330k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.7m.
So Ofer Elyakim receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at DSP Group has changed over time.
DSP Group, Inc. has reduced its earnings per share by an average of 47% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -5.9% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to checkthis free visual depiction ofwhat analysts expectfor the future.
Boasting a total shareholder return of 41% over three years, DSP Group, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Ofer Elyakim is paid around the same as most CEOs of similar size companies.
We're not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. CEO compensation is one thing, but it is also interesting tocheck if the CEO is buying or selling DSP Group (free visualization of insider trades).
If you want to buy a stock that is better than DSP Group, thisfreelist of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Gold Price Prediction – Prices Ease But the Pause is Likely Temporary
Gold prices eased on Wednesday as traders took profits following comments from US Treasury Secretary Mnuchin. The secretary said that a deal with China is approximately 90% complete. This lead the markets to believe that there was promise for the Trump-Xi meeting this weekend at the sidelines of the G20. Durable goods order dropped 1.3%, but non-defensive capital good rose putting upward pressure on US yields which paved the way for lower gold prices.
Gold prices eased on Wednesday after finishing well of its highs on Tuesday. Support on the yellow metal is seen near the 10-day moving average at 1,376. Resistance is seen near the June highs at 1,439. Short momentum has turned negative as the fast stochastic generated a crossover sell signal in overbought territory. The current reading on the fast stochastic is 87, above the overbought trigger level of 80, which could foreshadow a correction. The RSI (relative strength index) turned lower from a 10-year high and is currently printing a reading of 78, above the overbought trigger level of 70 which also could foreshadow a correction. Positive momentum appears to be accelerating which is reflected by the declining RSI and a slowing MACD histogram.
Durable goods orders which are items that are meant to last three years or more, dropped 1.3% in May after declining 2.8% in the prior month. Orders for transportation equipment tumbled 4.6% after diving 7.6% in April. Motor vehicles and parts orders rebounded 0.6% last month. Orders for non-defense aircraft plunged 28.2%. A silver lining was that new orders for US made capital goods rose more than expected in May. The Commerce Department said on Wednesday orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 0.4% last month amid increases in demand for machinery, and computers. Expectations were for core capital goods orders edging up 0.1% in May. Core capital goods orders rose 2.3% on a year-on-year basis.
Thisarticlewas originally posted on FX Empire
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Is SQI Diagnostics Inc.'s (CVE:SQD) CEO Overpaid Relative To Its Peers?
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Andrew Morris became the CEO of SQI Diagnostics Inc. (CVE:SQD) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for SQI Diagnostics
At the time of writing our data says that SQI Diagnostics Inc. has a market cap of CA$28m, and is paying total annual CEO compensation of CA$330k. (This is based on the year to September 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$300k. We looked at a group of companies with market capitalizations under CA$263m, and the median CEO total compensation was CA$152k.
It would therefore appear that SQI Diagnostics Inc. pays Andrew Morris more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at SQI Diagnostics, below.
On average over the last three years, SQI Diagnostics Inc. has grown earnings per share (EPS) by 17% each year (using a line of best fit). Its revenue is up 75% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assessthis data-rich visualizationof earnings, revenue and cash flow.
Since shareholders would have lost about 50% over three years, some SQI Diagnostics Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at SQI Diagnostics Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shareholders may want tocheck for free if SQI Diagnostics insiders are buying or selling shares.
If you want to buy a stock that is better than SQI Diagnostics, thisfreelist of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Unifirst Corp (UNF) Q3 2019 Earnings Call Transcript
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Unifirst Corp(NYSE: UNF)Q3 2019 Earnings CallJun 26, 2019,9:00 a.m. ET
• Prepared Remarks
• Questions and Answers
• Call Participants
Operator
Greetings and welcome to the UniFirst Third Quarter Earnings Conference Call. During the presentation all participants will be in a listen-only mode. After that, we will conduct a question-and-answer session.
(Operator Instructions) I would now like to turn the conference over to Steven Sintros, President and CEO. Please go ahead.
Steven S. Sintros--President and Chief Executive Officer
Thank you and good morning. I'm Steven Sintros, UniFirst's President and Chief Executive Officer. Joining me today is Shane O'Connor, Senior Vice President and Chief Financial Officer. We'd like to welcome you to UniFirst Corporation's call to review our third quarter results for fiscal year 2019 and to discuss our expectations going forward.
This call will be on a listen-only mode until we complete our prepared remarks. But first, a brief disclaimer. This conference call may contain forward-looking statements that reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties. The words anticipate, optimistic, believe, estimate, expect, intend and similar expressions that indicate future events and trends identify forward-looking statements. Actual future results may differ materially from those anticipated, depending on a variety of risk factors. For more information, please refer to the discussion of these risk factors in our most recent 10-Q and 10-K filings with the Securities and Exchange Commission.
I'm pleased to report that UniFirst's third quarter of fiscal 2019 produced strong results for both our Company and our shareholders. Overall, revenues were up, setting a new record high for the Company at $453.7 million, an increase of 6.2% when compared to the same period last year. As for profits, operating income was $60.2 million, sharply higher than the $47.1 million a year ago and fully diluted earnings per share came in at $2.46 per share compared to $1.85 reported for last year's third quarter.
Both revenue and profit results for the third quarter came in ahead of expectations. Many expense items trended favorably in the quarter, contributing to our stronger than expected results. However, I want to express caution that although these quarterly results should be viewed positively, we do not believe they are necessarily indicative of a sustained trend of profitability at this level.
Certain variable costs such as healthcare as well as other items cannot be expected to continue at the same levels as our most recent quarter. I'd also like to note that overall payroll expense moderated in the third quarter, partially due to continued market challenges being experienced related to recruiting and staffing. We continue to strategically plan and work through these issues as we move forward with the goal of increasing our headcounts to what we consider optimal levels that will maximize our efficiencies and our service levels to our customer.
And although we fully expect this additional staffing to positively contribute to ongoing Company growth and profits, it will also likely cause some short-term variability in our margins. Despite these challenges and our caution moving forward, we are pleased with the Company's overall performance in the quarter, a quarter where each of our operating segments exceeded expectations.
That said, I'd like to send sincere gratitude for our Executive -- from our Executive team and give credit to those folks who allow UniFirst to achieve our strong growth in the third quarter, our 14,000 plus employee team partners throughout North America, Central America and Europe.
Through the first nine months of the year, we continue to be encouraged by the solid performance of our sales organization, the primary driver of our organic growth. Our sales group continues to be on pace to exceed last year's record levels for new account sales. Likewise, I'm happy to report that UniFirst's customer retention continue to trend marginally positive when compared to the same time a year ago.
So as we look to the remainder of 2019 and ahead into fiscal year 2020, our primary focus remains the same. We continue to make smart investments in our people, our service infrastructure and our technologies companywide, in order to achieve our long-term strategic corporate objective to be universally recognized as the best service provider in the industry.
And as discussed during our last earnings call, our strong balance sheet and healthy cash flow position continues to allow for any competitive business acquisitions that may make sense, for further investments in our Company and our team partners and for considering other capital deployment opportunities, all designed to ultimately deliver additional value to our shareholders.
And with that, I'd like to turn the call over to Shane, who'll provide additional details on our quarterly results and our outlook for the remainder of fiscal 2019.
Shane O'Connor--Chief Financial Officer
Thanks, Steve. Revenues in our third quarter of 2019 were $453.7 million, up 6.2% from $427.4 million a year ago. Operating income increased to $60.2 million from $47.1 million in the prior-year period or 27.9% and net income for the quarter increased to $47.2 million or $2.46 per diluted share from $36.4 million or $1.85 per diluted share.
Our Core Laundry Operations, which make up close to 90% of UniFirst's total business, reported revenues for the quarter of $399.8 million, up 5.5% from the third quarter of 2018. Core Laundry organic growth which adjusts for the estimated effective acquisitions as well as the impact of a weaker Canadian dollar was 5.8%.
During the quarter, our organic growth continued to benefit from solid new account sales, slightly improved customer retention, as well as the impact of certain pricing adjustments. Core Laundry operating income was $53.4 million for the quarter, up from $40 million in the prior year and the segment's operating margin increased to 13.4% compared to 10.5% a year ago.
This increase was partially due to larger than anticipated benefits from lower healthcare claims, lower production payroll as a percentage of revenues, as well as the capitalization of sales commissioning cost due to the adoption of new revenue accounting guidance in our first quarter of fiscal 2019.
In addition, several other operating and administrative expenses trended favorably and were positive contributors to the margin improvement. These items were partially offset by higher merchandise amortization as a percentage of revenues, although, we are cautiously optimistic as our merchandise costs have started to moderate compared to our previous expectations.
Energy costs decreased to 4.2% of revenues in the third quarter of 2019, down from 4.4% a year ago. During our quarter, the segment's operating income benefited from the capitalization of internal labor costs for our ongoing CRM projects. In addition, the quarterly comparison benefited from higher non-capitalizable consulting costs we incurred in the third quarter of fiscal 2018, primarily related to the evaluation of our CRM go-forward alternatives during that time.
Revenues from our Specialty Garments segment, which deliver specialized nuclear decontamination and clean room products and services, increased 9.6% to $37.3 million in the third quarter. This increase was primarily due to the benefit of acquisitions in fiscal 2018, which increased quarterly revenues by 7.6%. The segment's operating margin decreased to 14.4% or $5.4 million from 16.4% or $5.6 million in the year ago period.
This decrease was primarily due to higher costs related to its 2018 acquisitions, as well as higher merchandise amortization as a percentage of revenues. As we have mentioned in the past, this segment's results can vary significantly from period to period due to seasonality and the timing of nuclear reactor outages and projects that require our specialized services.
Our First Aid segments reported revenues increased by 16.6% to $16.6 million and its operating income decreased by 8.1% to $1.4 million. These fluctuations are primarily due to the Company's initiative to expand its first aid band business into new geographies and the related investments to support the expanded infrastructure.
We continue to maintain a solid balance sheet and financial position with no long-term debt, and cash, cash equivalents and short-term investments totaling $349.4 million at the end of our third quarter of fiscal 2019. Cash provided by operating activities for the first nine months of the year was a $199.4 million, an increase of $32.1 million from the first nine months of the prior year.
This increase was primarily due to cash received of $13 million in our second quarter of fiscal 2019 from a settlement agreement with the lead contractor for the former version of the CRM system, with respect to which we recorded a $55.8 million impairment charge in fiscal 2017.
Also contributing to the increase were lower working capital needs for the business, as well as a $3 million or -- as well as $3 million received from the settlement of environmental litigation in the first quarter of fiscal 2019. This increase was partially offset by the one-time bonus paid to our employees during the first quarter of fiscal 2019.
For the first nine months of fiscal 2019, capital expenditures totaled $88.2 million as we continue to invest in our future with new facility additions, expansions, updates and automation systems that will help us meet our long-term strategic objective.
During the quarter, we capitalized $1.9 million related to our new CRM project, which consisted of both third-party consulting costs and capitalized internal labor costs. As of the end of our third fiscal quarter, we had capitalized $7.9 million related to the CRM project, of which $2.9 million was related to internal labor capitalized in fiscal 2019. We continue to expect that our full-year capital expenditures will approximate $115 million.
During the third quarter of fiscal 2019, we repurchased 99,500 common shares at an average share price of $147.47 for a total of $14.7 million, under our previously announced stock repurchase program. As of May 25th, 2019, the Company had repurchased a total of 144,500 common shares at an average price of $145.01 for $21 million under the program.
Although our acquisition activity in the first nine months of fiscal 2019 was nominal, we continue to look for and aggressively pursue additional targets as acquisitions remain an integral part of our overall growth strategy.
I'd like to take this opportunity to provide an update on our outlook for fiscal 2019. We now expect that our fiscal 2019 revenues will be between $1.802 billion and $1.809 billion. During the quarter, both our operating income and net income exceeded our expectations.
Based on these better than expected results, as well as an improved forecast for our fourth fiscal quarter of 2019, we now expect our full year diluted earnings per share will be between $8.75 and $8.85. This guidance assumes our fourth quarter organic growth in our Core Laundry Operations will be approximately 3%, which is down sequentially due to the impact of the timing of certain pricing adjustment, as well as an operating margin at the midpoint of the range of 10.3%.
As Steve mentioned earlier, our third quarter results were impacted by several items that did not provide -- that may not provide the same benefit going forward, including healthcare costs as well as lower payroll expense, due in some part to under-staffing. Our guidance does not assume a comparable benefit in our fourth quarter from favorable healthcare claims experience, because these costs are unpredictable and can be highly variable from period to period.
In addition, the guidance also assumes improvement in our current staffing levels and normalization of some of our other operating and administrative expenses that provided benefit in our third fiscal quarter. As a reminder, our guidance for fiscal 2019 includes one extra week of operations compared to fiscal 2018, due to the timing of our fiscal calendar and assumes our current level of outstanding common shares.
This concludes our prepared remarks and we would now be happy to answer any questions that you might have.
Operator
(Operator Instructions) And our first question comes from the line of Andrew Wittmann with Robert W. Baird. Please proceed.
Andrew Wittmann--Robert W. Baird -- Analyst
Great, good morning, guys.
Steven S. Sintros--President and Chief Executive Officer
Good morning.
Andrew Wittmann--Robert W. Baird -- Analyst
I guess my first question is a little bit devil's advocate and also there is some underlying truth to this question too, which is -- I mean the margins are obviously really good here, much better than you expected, we expected, everybody expected, and that's good. Growth was good. And I think a lot of folks look at your stock and believe that the margins have had a room for upside, you know based on history, based on peers, whatever.
So, we heard you loud and clear that you were understaffed here, Steve, and that that was kind of unsustainable. But can you just talk about that a little bit more and say like why is that unsustainable? Help us get comfortable that those investments really need to be made, given the strength of the quarter and the fact that your business is trending positively and not so fast as you're today?
Steven S. Sintros--President and Chief Executive Officer
Sure. You know, couple of things and the under-staffing comment I think is valid for sure, but I don't want to put too much weight on it either. I think that's one of the things in the quarter. Based on the variability and I think volatility in the employment market, there is a little more ups and down in staffing levels we've seen over the last couple of years and quarter-to-quarter can provide you some temporary headwinds or benefits.
And so I think the comment was given in that regard. I think from the perspective of getting to where we feel we need to get to longer-term on growth rates, customer service levels to sustain better retention rates and so on, we feel there is a level of staffing and stability in the staffing that is optimal, that we're shooting toward, primarily on the service side and somewhat on the production side.
So the comments were made a little bit more in that regard. I think there is investments that we still feel need to be made in some of those areas to what we would consider, optimize those functions. But like I said, we're pleased with some of the trends in the quarter, but from a competitive perspective and from a long-term capabilities perspective, we do have a roadmap that we're looking at in terms of where we want to go with these different capabilities.
So that's why we're trying not to have one quarter's results sort of be viewed as everything's optimized at this point and these investments don't be -- don't need to be made, but I understand -- I understand the question, and we're balancing that as we go.
Andrew Wittmann--Robert W. Baird -- Analyst
Okay. I want to drill in a little bit more on the margins, because I think it's important. A couple of weeks ago at our conference, I think I asked you, if you could more confidently say that the margins had kind of bottomed this year, you know these quarters and -- are seeing, but do you expect that the margins had bottomed, can you say now after this quarter even recognizing that some of these things aren't maybe as sustainable as we'd all hope they would be. Can you more confidently say now that you feel like the margin bottom is in place from here and that together with the top line leverage that you might be getting here that you feel like the margins can start to expand as we move into fiscal 2020 and beyond.
Steven S. Sintros--President and Chief Executive Officer
I think, Andy, we probably really don't want to get into that much forward-looking at this point, partially because I think we know that next year as we move closer to what will be preparing forward deployment of our technology system, there is going to be some costs that are incurred along the way there that could impact that statement, and that's kind of what we're working through and expect to have more communication as we go into year-end.
I think in terms of -- as we went through this year, some of the caution was around a couple of different areas. One being merchandise and that sort of was always the wildcard in terms of what were the trends that are going to sustain in terms of merchandise investments into the customer base and we're seeing that or have seen that during the quarter, moderate some. And that is encouraging, because I think that is an area that can swing the margins a point here or point there over time.
So again I'll go back to what we said, we're encouraged by the trend, but there is still investments to be made and I think next year we'll come together as we plan for the timing of the technology release and those other costs. And I do think that we have investments to make in the labor force as well to get to that optimal place where we feel like the teams are in place to provide the level of service that will lead to those sustainable growth rates as we move forward.
Andrew Wittmann--Robert W. Baird -- Analyst
Okay. And I guess I'm going to finish up with this one, I might jump back in queue later. But Shane, wanted to just try to get granular on some of these things, because they were significant. If you could help us understand the year-over-year benefit from the bigger buckets here? I heard healthcare, production, merchandise and sales commissions in the past, many of those you've helped to actually quantify, would you be willing to do that and able to do that again here today?
Shane O'Connor--Chief Financial Officer
Yeah, I can speak to some of the larger buckets, just coming off of last quarter. Some of these areas, it started to trend favorably in our -- in line with sort of our original expectations, and as you can see from our operating results, we continue to trend favorably -- or compared to what we originally expected. I mean, Steve had mentioned the fact that production and service payroll trended favorably in some part due to under staffing. During the quarter, we actually received the benefit compared to prior-year comparable quarter of about 20 basis points to 30 basis points. And obviously sequentially, that's the improved off of last quarter where it was a headwind.
Our merchandise expense also started to moderate and also benefited from the strong organic growth during the quarter. That provided about 50 basis points of headwind, but that has improved compared to our original expectation. The selling payroll, which is strongly influenced by the capitalization of the commissions, it was about 70 basis points to 80 basis points of benefit year-over-year.
Healthcare claims also came in very, very strong -- as a strong benefit for the quarter also, that was about 70 basis points to 80 basis points of benefit. And then I mentioned earlier that energy was about 20 basis points. In an above that, there were just a number of areas that trended favorably that make up the delta between our operating margin performance year-over-year. And in a lot of cases, those areas are subject to timing and we believe that this just turned out to be a low expense quarter.
In some cases, we're anticipating that some of those costs that we benefited from in the third quarter are actually going to roll over to the fourth and in other areas where our expectation is that they will normalize back to more of a historical level, but those are the macro items that sort of benefited the quarter.
Steven S. Sintros--President and Chief Executive Officer
And just to add to that, I think Andy, Shane mentioned a strong revenue growth during the quarter and our expectations are that the fourth quarter, the organic growth will take a step back, largely due to the timing of some pricing adjustments between this year and last year, and so those are causing some things that were a benefit this quarter, may not be quite the same benefit, from a margin perspective, on a year-over-year comparison next quarter.
Andrew Wittmann--Robert W. Baird -- Analyst
All very helpful answers, thank you. You might hear from me later, but I'll yield the floor for now.
Steven S. Sintros--President and Chief Executive Officer
Thank you.
Operator
The next question comes from the line of Tim Mulrooney with William Blair. Please proceed.
Tim Mulrooney--William Blair -- Analyst
Yeah, good morning.
Steven S. Sintros--President and Chief Executive Officer
Good morning.
Shane O'Connor--Chief Financial Officer
Good morning.
Tim Mulrooney--William Blair -- Analyst
Organic growth of 5.8%, obviously a very strong quarter for you guys. Is there anything to call out here in terms of specific customers or end-markets where you've seen particular pockets of strength or would you characterize the strength as being pretty broad-based?
Steven S. Sintros--President and Chief Executive Officer
I would say it's pretty broad based. I made the comment on the continued strength of our sales organization, coming off a strong sales year last year. We've continued to sell more new business this year. I think in the quarter, we sold -- or at least year-to-date, about 5% more than last year's strong year.
From a geographic perspective or end-market perspective, I'd say it has been pretty broad, I mean we're seeing some strength in the energy sector in West Texas, but that's a little bit isolated. It's not as broad, certainly is the last energy cycle.
And from a retention perspective, just broadly, we're a little bit better than the prior year. Shane mentioned the timing of the pricing adjustments that helped the quarter and proportionally won't help next quarters as well (ph) . But overall, I think we see a pretty healthy environment and one that's allowed us to be -- show decent growth rates.
Tim Mulrooney--William Blair -- Analyst
Yeah. No, absolutely. Did you guys quantify those pricing adjustments, Steve?
Steven S. Sintros--President and Chief Executive Officer
No. We typically don't break down those components of growth and I've always said before that part of the reason we don't is, quantifying those price adjustments are tricky because you'd have to really take into effect the pricing of new accounts versus the pricing of accounts you lost and it sort of can skew the relative impact of price overall. So we don't break all that out.
Tim Mulrooney--William Blair -- Analyst
Yeah. No, that's fair. One more from me, did weather impact you guys at all in the third quarter? I mean, I know it wasn't a major factor for you last quarter, but talking to a lot of services companies, this is a common theme that we're hearing. With all the rain and flooding in the Midwest, I'm curious if you felt any impact there?
Steven S. Sintros--President and Chief Executive Officer
Not particularly (ph) I think we -- may be based on our geographic presence, not being as strong in some of those parts of the country, we really didn't have any real headwinds there.
Tim Mulrooney--William Blair -- Analyst
Okay, great. Thank you. Congrats on a nice quarter.
Steven S. Sintros--President and Chief Executive Officer
Thank you.
Operator
(Operator Instructions) The next question comes from line of Judah Sokel with J.P. Morgan. Please proceed.
Judah Sokel--J.P. Morgan Securities LLC -- Analyst
Hi, good morning, how are you?
Steven S. Sintros--President and Chief Executive Officer
Good morning.
Judah Sokel--J.P. Morgan Securities LLC -- Analyst
First question is just a quick housekeeping question. The 3% organic guidance for core rental, does that adjust for the extra week to make it a same-day basis?
Shane O'Connor--Chief Financial Officer
It does, it does.
Judah Sokel--J.P. Morgan Securities LLC -- Analyst
Okay.
Shane O'Connor--Chief Financial Officer
We hope the impact of the extra week, which will have about a 7.5% impact on the growth rate in that quarter.
Judah Sokel--J.P. Morgan Securities LLC -- Analyst
Okay, perfect. And then my second question is more of a high-level industry question. After two large mergers in the Uniform Services sector over the past couple of years, as well as some other mid-size, large-scale mergers, do you think there will be more scaled mergers in the industry prospectively? And do you expect UniFirst to play a role in any potential activity? Thank you.
Steven S. Sintros--President and Chief Executive Officer
Sure, Judah. I mean it's a good question. I think you know there is, not the larger players that they used to be, as you alluded to, there is still some good regional players out there that certainly we would like to participate in further consolidation with. As far as consolidation at the top of the industry, your guess is as good as mine. I think it remains to be seen how that shakes out over the next five plus years. But right now we're sort of focused on ourselves in that regard and feel good about our opportunity to be a strong player in the marketplace. And like Shane said, we'll look at opportunities on acquisitions as they come available in due course.
Judah Sokel--J.P. Morgan Securities LLC -- Analyst
Makes sense, thank you, guys.
Steven S. Sintros--President and Chief Executive Officer
Thank you.
Operator
(Operator Instructions) And we do have a follow-up question from Andrew Wittmann with Robert W. Baird. Please proceed.
Andrew Wittmann--Robert W. Baird -- Analyst
Yeah. Great, so as to the last question, you said you have more information later, Steve, Shane both of you on the CRM. Just can you give us an update on that progress? How well implemented are you? And any updated timing on when that might go live?
Steven S. Sintros--President and Chief Executive Officer
I think that the comments that we'll make about the CRM at this point in time is, from our perspective, the project is going very, very well and we're very optimistic about the progress that we'd made. We also are very pleased with the partnership and the company that we partnered with, as we implement the changes to the system, as we move farther along our implementation. As it relates to the timeline, I think that we'll still defer those comments to the end of our fiscal year and the comments we make in a few months, where we'll give you an update on our next fiscal year as well as additional information on the timing of that project.
Andrew Wittmann--Robert W. Baird -- Analyst
Great. And then I just -- guess my last question has to do with kind of the macro environment a little bit more and specific around add stops, I was hoping you could comment on that. If you look at the labor data, we've got this low unemployment rate, but jobs last month in terms of net adds kind of missed, kind of tells me that there is an increasing shortage of labor in the markets, but that's just one view of it. Steve, I think maybe if you could talk about how -- what you're seeing from your customer behavior about their ability to add employees, if it's a labor shortage in terms of not being able to find people, if it's business demand levels that's driving their behavior. Just some thoughts around the operating environment there, I think would be helpful.
Steven S. Sintros--President and Chief Executive Officer
Sure. I think our situation is sort of symptomatic of our customers as well. And where there is -- there is a labor shortage, for sure. In our add reductions number, I didn't mention this, but we're a little bit incrementally worse than the prior year, not big enough to make a major move on the growth rates. But I think we are hearing from customers consistent, what we're seeing with ourselves which is that there is just, in many, many markets there is a supply demand issue in terms of labor availability. We have really not heard that the lack of hiring broadly relates more to business softness, but more to difficulty finding labor. So I think that's a...
Andrew Wittmann--Robert W. Baird -- Analyst
You said -- Sorry, go ahead. No, please go ahead.
Steven S. Sintros--President and Chief Executive Officer
No, I was -- I was pretty much completed.
Andrew Wittmann--Robert W. Baird -- Analyst
Okay, so you said that add-stops are a little weaker year-over-year, but there is still positive?
Steven S. Sintros--President and Chief Executive Officer
No, I think we've talked about this before, and I think it gets into, we don't get into the nitty-gritty with some of these operating metrics, our adds reductions on the garment side tend to run negative fairly consistently. I think partially based on maybe the way we track certain things between new sales and adds reductions, but they're just incrementally worse. I mean, they are sort of -- they're not dramatically negative but they are somewhat negative and have been and typically are on a consistent basis.
Andrew Wittmann--Robert W. Baird -- Analyst
Okay, all right. That's it from me. Thank you.
Steven S. Sintros--President and Chief Executive Officer
Thank you.
Operator
And there are no further questions on the telephone lines.
Steven S. Sintros--President and Chief Executive Officer
Okay, great. I'd like to thank everyone for joining us today to review our third quarter results. We look forward to speaking with you again in October, when we expect to report our fourth quarter and full year performance, as well as our expectations for fiscal 2020. Thank you and have a great summer.
Operator
That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.
Duration: 33 minutes
Steven S. Sintros--President and Chief Executive Officer
Shane O'Connor--Chief Financial Officer
Andrew Wittmann--Robert W. Baird -- Analyst
Tim Mulrooney--William Blair -- Analyst
Judah Sokel--J.P. Morgan Securities LLC -- Analyst
More UNF analysis
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The stops are intended to draw attention to President Donald Trump’s immigration policies, which have seen migrant children separated from their families. Homestead is about 40 miles southwest of Miami and is a spot where the U.S. is detaining migrant teens.
Massachusetts Sen. Elizabeth Warren visited the site Wednesday, with Minnesota Sen. Amy Klobuchar planning a stop later in the afternoon.
Former Texas Rep. Beto O’Rourke is scheduled to visit the site on Thursday.
And on Friday, California Sen. Kamala Harris, former housing secretary Julian Castro, former U.S. Rep. John Delaney and Pete Buttigieg, the mayor of South Bend, Indiana, all plan to visit.
Ten presidential candidates, led by Sen. Elizabeth Warren, are set to meet on the debate stage for the first night of Democratic debates to offer their pitches to voters and attempt a breakout moment for their campaigns.
For many of the White House hopefuls, Wednesday’s debate will be the highest-profile opportunity yet to offer their vision for the country.
Given the massive field, the debate will be split over two nights, with 10 other candidates — including former Vice President Joe Biden and Vermont Sen. Bernie Sanders — appearing Thursday.
Warren, the sole top-tier candidate at Wednesday’s debate, will take center stage. But she could still face challenges. The other candidates aren’t as well known and could use the moment to make an aggressive move to stand out.
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Have Insiders Been Buying SQI Diagnostics Inc. (CVE:SQD) Shares This Year?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sellSQI Diagnostics Inc.(CVE:SQD), you may well want to know whether insiders have been buying or selling.
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia Universitystudyfound that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
View our latest analysis for SQI Diagnostics
In the last twelve months, the biggest single purchase by an insider was when Director Gerald Connor bought CA$667k worth of shares at a price of CA$0.08 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$0.15), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Happily, we note that in the last year insiders bought 16.7m shares for a total of CA$1.3m. SQI Diagnostics may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
SQI Diagnostics is not the only stock that insiders are buying. For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. SQI Diagnostics insiders own about CA$12m worth of shares (which is 42% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
The fact that there have been no SQI Diagnostics insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like SQI Diagnostics insiders think the business has merit. Along with insider transactions, I recommend checking if SQI Diagnostics is growing revenue. This free chart ofhistoric revenue and earnings should make that easy.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
San Francisco Pride Refuses to Ban Google From Its Parade, But Says They 'Must Do More'
San Francisco Prideorganizers say they won’t banGooglefrom the annual Pride Parade on Sunday, despite receiving a letter signed by almost 100 Google employees concerned about how their company handles hate speech.
The employees asked for Google to be banned from the pride parade on June 30th. The company came under fire this month for refusing to remove homophobic videos targeting a journalist. Instead, YouTubebanned hate speechand demonetized the channel. However, the company still offered a platform for the pundit, Steven Crowder, to direct his viewers to a site to purchase merchandise.
“Whenever we press for change, we are told only that the company will ‘take a hard look at these policies,'” theletter says. “But we are never given a commitment to improve, and when we ask when these improvements will be made, we are always told to be patient.”
San Francisco Pride organizers acknowledged that Google and Youtube “must do more to elevate and protect the voices of LGBTQ+ creators,” but said Google “has been a considerate partner for a number of years.”
“As we commemorate the roots of our movement in resistance, we also understand that San Francisco Pride has become synonymous with the values of inclusion and acceptance,” organizers saidin a statement. “In the spirit of community and growth, we confirm Google as a continued participant in the 2019 SF Pride Parade.”
A Google spokesman toldFortunethe company has “marched in the San Francisco Pride Parade for more than a decade, and we are excited to continue the tradition this weekend.”
The decision comes after Google employees were asked to not protest on the company’s float, but were reminded they are welcome to if they march in a personal capacity, outside of the Google contingent.
It’s a tradition for many tech companies, including Google,Amazon,Apple, and many others, to sponsor floats during San Francisco’s Pride parade for LGBTQ employees, allies, and executives who want to participate in the festive event. Apple CEO Tim Cook, the most prominent openly gay CEO in the United States, has previously made an appearance at the parade with Apple’s team.
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Photos of migrant father and daughter spark global anguish
WASHINGTON (AP) — From the Vatican to the U.S. Congress and campaign trail, expressions of anguish, empathy and outrage poured out Wednesday over the photos of a migrant father and young daughter who drowned while trying to cross the Rio Grande from Mexico to enter the United States without legal permission. The photos show the bodies of the man and his 23-month-old daughter lying face down near the river bank. Her arm was draped around his neck, suggesting she clung to her father in their final moments. The photos published by the Mexican newspaper La Jornada were distributed worldwide by The Associated Press. Oscar Alberto Martinez Ramirez and daughter Valeria were fleeing from El Salvador, which is wracked by violent crime. The mother, Tania Vanessa Avalos, was still on the Mexican side of the river and survived. Some of the reaction: VATICAN CITY Pope Francis saw the photos and was deeply saddened, a Vatican spokesman said. "With immense sadness, the Holy Father has seen the images of the father and his baby daughter who drowned in the Rio Grande River while trying to cross the border between Mexico and the United States," said the Vatican's interim spokesman, Alessandro Gisotti. "The pope is profoundly saddened by their death, and is praying for them and for all migrants who have lost their lives while seeking to flee war and misery," Gisotti's statement added. Francis has frequently been vocal in his support of Mexico's efforts to help migrants and critical of the U.S. for blocking them at the border. During a visit to the U.S.-Mexico border in 2016, he criticized then-presidential candidate Donald Trump, suggesting that anyone who wanted to build a wall along the border was "not a Christian." In April, the pontiff donated $500,000 to help migrants in Mexico, offering assistance to local projects that provide food, lodging and basic necessities. U.S. CONGRESS Congress' top Democrats said they hoped the photos would challenge the Trump administration's conscience while pressuring the president to ease his efforts to make it harder for people to enter the U.S. A top Republican said the photos should stir Congress to address the crisis on the border. Story continues "This isn't who we are as a country. We have obligations to humanity that are being completely ignored," House Speaker Nancy Pelosi, D-Calif., told The Associated Press in a brief interview. "This is a manifestation of behavior that is outside the circle of civilized human behavior." Senate Minority Leader Chuck Schumer suggested that Martinez and his daughter might not have died had Trump agreed to Democratic efforts to help migrants fleeing Central American countries to enter the U.S. as refugees. "How could President Trump look at this picture and not understand that these are human beings fleeing violence and persecution, willing to risk a perilous, sometimes failed journey in search of a better life," Schumer, D-N.Y., said on the Senate floor. He added, "If our ports of entry were adequately staffed, we had enough asylum judges and our asylum laws respected, they might not have perished." Republican Sen. Ron Johnson of Wisconsin, the chairman of the Homeland Security Committee, opened a hearing Wednesday saying the photo should propel Congress to act. "I don't want to see another picture like that on the U.S. border," Johnson said. "I hope that picture alone will catalyze this Congress, this Senate, this committee to do something," Johnson said. "It is well past time. And that picture that all Americans woke up this morning looking at, again should be used as a catalyst for that kind of action." The congressional leaders spoke as the photographs rocketed around the internet and were used by news organizations usually hesitant to publish pictures of dead bodies. They immediately caught the attention of a Congress trying to approve billions of dollars in humanitarian aid for the migrants streaming across the southern U.S. border. Asked if the photos could alter the immigration debate, Pelosi said, "I would hope so, but we've had many challenges to conscience which haven't. But let's hope that this just tips the scale." DEMOCRATIC PRESIDENTIAL CANDIDATES The photos also spurred many of the Democratic presidential candidates to criticize U.S. immigration policy. "Trump is responsible for these deaths," former Texas Rep. Beto O'Rourke said in a tweet that included a link to the photo. Pete Buttigieg, the mayor of South Bend, Indiana, said the country needs to summon the political will to fix the immigration system. "If you can look at a picture like that and say that it is acceptable to continue doing what we've been doing, then I just don't understand," he said on MSNBC. Sen. Bernie Sanders of Vermont said on Facebook: "This is horrific. Trump's policy of making it harder and harder to seek asylum_and separating families who do_is cruel, inhumane and leads to tragedies like this. We must stop the deaths. We must restore humanity to our immigration system." Julian Castro, a former housing secretary, also blamed the Trump administration. "People see that photo and they might wonder, 'What can I do about that?' What you can do about it is push as hard as you can so that the Unites States government changes this policy of metering," Castro said in Miami, the sight of the first Democratic debates. "This administration is culpable." |
Are Insiders Buying SQI Diagnostics Inc. (CVE:SQD) Stock?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares inSQI Diagnostics Inc.(CVE:SQD).
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia Universitystudyfound that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for SQI Diagnostics
In the last twelve months, the biggest single purchase by an insider was when Director Wilmot Matthews bought CA$667k worth of shares at a price of CA$0.08 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$0.15), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months insiders paid CA$1.3m for 16.7m shares purchased. SQI Diagnostics may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
SQI Diagnostics is not the only stock that insiders are buying. For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. SQI Diagnostics insiders own about CA$12m worth of shares (which is 42% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
The fact that there have been no SQI Diagnostics insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like SQI Diagnostics insiders think the business has merit.I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow for free.
Of courseSQI Diagnostics may not be the best stock to buy. So you may wish to see thisfreecollection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How Blockchain Could Decentralize the Music Industry
The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Our guest authors invite readers to discuss the most polemic, ambiguous and debatable topics within the cryptocurrency, blockchain and fintech industries.
If you want to become our guest author and be published on Cointelegraph, please send us an email atcontributor@cointelegraph.com
“History, despite its wrenching pain, cannot be unlived,
but if faced with courage, need not be lived again.”
— Maya Angelou
Thirty years after the Tiananmen Squareprotests, theChinesegovernment is still working to remove any trace of the event from its cultural history.
Earlier this month a musicfan wrote, “I don’t dare to say it, nor do I dare to ask” on a popular Chinese online forum in regard to thedisappearance of Li Zhi, a Chinese musician who dared to speak out on social issues and democracy in his songs.
Three months ago, Li’s tour was unexpectedly canceled, his social media accounts went offline and his entire discography was scrubbed from China’s music streaming platforms. This involuntary “ghosting” isn’t isolated: The Chinese government has been cracking down on artists and activists like Li in preparation for the 30th anniversary of the Tiananmen Square pro-democracy protests that took place on June 4, 1989. It’sreportedthat China’s Communist Party has detained dozens of activists and artists who have mentioned the atrocities of that massacre.
It’s no surprise that the Chinese government has never acknowledged that day or thethousands of civilianswho were shot and killed at the hands of its army. This isn’t uncommon for countries with one-party systems and regimes that want to control information. But while it attempts to erase the collective memory of the Tiananmen protests, artists and activists like Li are fighting to remember — to ensure that something so dark would never take place at the hands of a governing body again.
Unfortunately, tech giants in theUnited Statesfundamentally aid in the disenfranchisement of creators like Li — and therefore, in the suppression of democracy. In the early spring,Hong Kong Free Pressreported that Apple Music had removed Hong Kong-based singer Jacky Cheung’s song for its reference to Tiananmen Square:
“The youth are angry, heaven and earth are weeping/ How did our land become a sea of blood?/ How did the path home become a path of no return?”
Pro-democracy singers Anthony Wong and Denis Ho have also been removed from Apple Music in China. TheAppleApp Storeremoved applicationsfrom its Chinese offering that discussed the Tiananmen Square protests, including The New York Times, Radio Free Asia and Tibetan News. Twitter recentlyrefusedto approve an emoji marking the 30th anniversary of the protests.Microsoft and LinkedInsteer clear of talking about their policies in China with the media. You get the picture.
The tech industry has failed artists like Li Zhi, Jacky Cheung, Anthony Wong and Denis Ho by aiding in the suppression of information and free speech.
If the U.S. is truly a nation that values democracy, freedom, and humanity — the technology industry should wield its power to combat censorship.
Right now, music services cannot — and will not — protect the voices of artists worldwide, because the interests of the powerful will almost always win over those of creators on centralized services. That’s why we must put the power back in the hands of the people by using decentralized services andblockchaintechnology.
Because companies like Apple Music are centralized, they must comply with local regulations to remain operational, however unjust that regulation may be. This means they rapidly and readily succumb to the pressure of censors of many kinds, including one-party states like China. Creators don’t have any say in how their content is used or whether it stays available at all. This is true because it’s playing out right before our very eyes.
The next generation of music services should use technology like blockchains to combat censorship. Decentralizing the control of music distribution and content ownership gives artists, fans and community members the freedom to express themselves and interact directly with one another on their own terms. With no central authority — a government or corporation — a decentralized network can protect controversial creators from being silenced. Meanwhile, centralized services like Apple Music are required delist content when told to; with decentralized control, nobody would be capable of this — Li Zhi’s music would never have been taken down and the history of the Tiananmen Square pro-democracy protests would never be erased.
This isn’t just a dream or a manifesto. Companies and projects are alreadyusing blockchainto solve some of the music industry’s biggest issues. My company, Audius, is a decentralized music-sharing protocol and the first to deliver a social music experience that directly connects artists and fans. Open Music Initiative is using blockchain to identify music creators so they can receive their deserved royalty payments. Smackathon, a competition created by Pitbull, is working to bring the top decentralized streaming services to music.
So, what exactly doesmusicon the blockchain mean? What would the industry look like? It will be a decentralized community of artists, fans and developers sharing and defending the world’s music in accordance with the following principles:
1. Decentralization:Members of the network will operate it, maintaining control of their data. With no central authority, it will be censorship-resistant, secure and community-driven.
2. Open-source:Anyone can contribute ideas, build new clients or features, or host nodes on the network.
3. Aligned incentives:Everyone who contributes value is fairly compensated.
Musicians will be able to generate immutable and time-stamped records of their creative works, making content ownership publicly verifiable and unchangeable. With a network that is decentralized, content-addressed and secured by a blockchain, content cannot be tampered with. If a creator elects, their content will remain live forever.
Content moderation will be community-driven, with disputes being resolved by a jury of peers on the network. For example, this arbitration system could resolve claims of piracy or determine revenue shares for derivative content. No government intervention or centralized entity will be able to call the shots on what can and can’t be taken down in the way they do today to silent dissenting voices.
It’s time we protect vulnerable creators with censorship-resistant technology. Let’s enable artists to distribute what they like, when they like, to whom they like — making it impossible for a government to decide which content can and cannot be listened to by its citizens.
What effect do you think blockchain will have on the music industry? How do you feel about big tech removing artists from their platforms to comply with governments like China? Let us know what you think in the comment section below.
While Cointelegraph fully supports the right to free speech, Cointelegraph reserves the right to exclude comments that it believes to be objectionable, offensive, disrespectful or otherwise inappropriate.
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Is The Walt Disney Company (NYSE:DIS) A Financially Sound Company?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
Investors seeking to preserve capital in a volatile environment might consider large-cap stocks such as The Walt Disney Company (NYSE:DIS) a safer option. Market participants who are conscious of risk tend to search for large firms, attracted by the prospect of varied revenue sources and strong returns on capital. But, the health of the financials determines whether the company continues to succeed. I will provide an overview of Walt Disney’s financial liquidity and leverage to give you an idea of Walt Disney’s position to take advantage of potential acquisitions or comfortably endure future downturns. Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourselfinto DIS here.
See our latest analysis for Walt Disney
Over the past year, DIS has ramped up its debt from US$25b to US$57b , which accounts for long term debt. With this increase in debt, the current cash and short-term investment levels stands at US$10b , ready to be used for running the business. On top of this, DIS has generated US$14b in operating cash flow over the same time period, leading to an operating cash to total debt ratio of 24%, meaning that DIS’s current level of operating cash is high enough to cover debt.
Looking at DIS’s US$44b in current liabilities, it seems that the business arguably has a rather low level of current assets relative its obligations, with the current ratio last standing at 0.77x. The current ratio is calculated by dividing current assets by current liabilities.
With a debt-to-equity ratio of 54%, DIS can be considered as an above-average leveraged company. This is common amongst large-cap companies because debt can often be a less expensive alternative to equity due to tax deductibility of interest payments. Accordingly, large companies often have lower cost of capital due to easily obtained financing, providing an advantage over smaller companies. We can test if DIS’s debt levels are sustainable by measuring interest payments against earnings of a company. Preferably, earnings before interest and tax (EBIT) should be at least three times as large as net interest. For DIS, the ratio of 25.05x suggests that interest is comfortably covered. It is considered a responsible and reassuring practice to maintain high interest coverage, which makes DIS and other large-cap investments thought to be safe.
At its current level of cash flow coverage, DIS has room for improvement to better cushion for events which may require debt repayment. In addition to this, its lack of liquidity raises questions over current asset management practices for the large-cap. Keep in mind I haven't considered other factors such as how DIS has been performing in the past. I recommend you continue to research Walt Disney to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for DIS’s future growth? Take a look at ourfree research report of analyst consensusfor DIS’s outlook.
2. Valuation: What is DIS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether DIS is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
General Electric's machinists oppose tentative labor deal
By Alwyn Scott
NEW YORK (Reuters) - The machinists union said on Wednesday it opposes a tentative labor contract reached this week with General Electric Co, potentially impeding the Boston-based conglomerate's efforts to avoid labor unrest during a difficult period.
"Our recommendation is to reject," Brian Bryant, general vice president of the International Association of Machinists and Aerospace Workers (IAM) told Reuters. "It's what we consider a concessionary contract."
The IAM, one of 11 unions representing 6,600 workers that would be covered by the deal, has workers in GE's profitable aviation and healthcare businesses, not the power unit that has dragged down GE's profits in recent years.
GE and leaders representing the unions reached the tentative four-year agreement on Monday, following 21 days of talks. The lead and largest union at GE, known as the IUE-CWA, can pass the agreement if 50 percent plus one member vote to approve it.
"We hope that the IUE will also vote it down and lead to more negotiations," Bryant said.
GE said balloting is expected to take place by July 11. The contract provides $1.80 in wage increases over four years, no medical premiums increases in 2020 and $4,500 in cash payments.
Bryant said workers would lose some overtime they now receive when starting shifts early or staying late at jet engine factories.
Paul Lalli, head of labor negotiations at GE, said in a statement on Wednesday that the company had "achieved our goal of creating a fair deal that provides good wages and meaningful benefits for our employees while addressing the unique challenge we face today to return GE to a position of strength."
The company was not immediately available to comment on the IAM decision.
IUE-CWA leaders said earlier this week that they endorse the contract and will recommend it to their members. IUE-CWA leaders did not respond to requests for comment on Wednesday.
GE has been laying off thousands of workers worldwide as it restructures in the wake of a $22.8 billion loss last year, caused largely by a write down in the power unit.
Among the unions covered by the agreement the IUE-CWA is the largest and the IAM is the second-largest. The agreement covers workers at facilities Massachusetts, Ohio, Kentucky, Kansas, New York and Wisconsin, GE said.
(Reporting by Alwyn Scott; Editing by Chizu Nomiyama) |
Did Hedge Funds Drop The Ball On Baozun Inc (BZUN) ?
After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Baozun Inc (NASDAQ:BZUN).
Hedge fund interest inBaozun Inc (NASDAQ:BZUN)shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare BZUN to other stocks including EVO Payments, Inc. (NASDAQ:EVOP), Mednax Inc. (NYSE:MD), and Inter Parfums, Inc. (NASDAQ:IPAR) to get a better sense of its popularity.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's review the recent hedge fund action encompassing Baozun Inc (NASDAQ:BZUN).
At Q1's end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BZUN over the last 15 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,Kylin Managementwas the largest shareholder of Baozun Inc (NASDAQ:BZUN), with a stake worth $14.8 million reported as of the end of March. Trailing Kylin Management was Moore Global Investments, which amassed a stake valued at $14.5 million. Citadel Investment Group, Indus Capital, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
Seeing as Baozun Inc (NASDAQ:BZUN) has faced falling interest from the entirety of the hedge funds we track, we can see that there were a few hedge funds that slashed their positions entirely heading into Q3. Interestingly, Benjamin A. Smith'sLaurion Capital Managementdumped the largest stake of the 700 funds tracked by Insider Monkey, valued at close to $10.9 million in stock. Charles Clough's fund,Clough Capital Partners, also dropped its stock, about $3.7 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Baozun Inc (NASDAQ:BZUN) but similarly valued. These stocks are EVO Payments, Inc. (NASDAQ:EVOP), Mednax Inc. (NYSE:MD), Inter Parfums, Inc. (NASDAQ:IPAR), and Edgewell Personal Care Company (NYSE:EPC). This group of stocks' market valuations are closest to BZUN's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EVOP,13,61327,3 MD,23,298044,-2 IPAR,22,98080,11 EPC,19,179921,1 Average,19.25,159343,3.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $61 million in BZUN's case. Mednax Inc. (NYSE:MD) is the most popular stock in this table. On the other hand EVO Payments, Inc. (NASDAQ:EVOP) is the least popular one with only 13 bullish hedge fund positions. Baozun Inc (NASDAQ:BZUN) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on BZUN as the stock returned 17.7% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About WD-40 Company (WDFC)
After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards WD-40 Company (NASDAQ:WDFC).
WD-40 Company (NASDAQ:WDFC)investors should be aware of a decrease in enthusiasm from smart money lately.WDFCwas in 14 hedge funds' portfolios at the end of the first quarter of 2019. There were 15 hedge funds in our database with WDFC holdings at the end of the previous quarter. Our calculations also showed that WDFC isn't among the30 most popular stocks among hedge funds.
In the financial world there are a lot of gauges shareholders put to use to size up publicly traded companies. A duo of the less utilized gauges are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the best fund managers can beat the S&P 500 by a healthy margin (see the details here).
Let's go over the fresh hedge fund action regarding WD-40 Company (NASDAQ:WDFC).
At Q1's end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in WDFC over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in WD-40 Company (NASDAQ:WDFC) was held byRenaissance Technologies, which reported holding $85.3 million worth of stock at the end of March. It was followed by GLG Partners with a $25.4 million position. Other investors bullish on the company included Citadel Investment Group, GAMCO Investors, and AQR Capital Management.
Seeing as WD-40 Company (NASDAQ:WDFC) has witnessed declining sentiment from hedge fund managers, we can see that there lies a certain "tier" of money managers who were dropping their positions entirely last quarter. It's worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capitalsaid goodbye to the biggest position of the "upper crust" of funds monitored by Insider Monkey, comprising about $11.1 million in call options, and Matthew Hulsizer's PEAK6 Capital Management was right behind this move, as the fund said goodbye to about $1.4 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds last quarter.
Let's go over hedge fund activity in other stocks similar to WD-40 Company (NASDAQ:WDFC). We will take a look at Legg Mason, Inc. (NYSE:LM), SiteOne Landscape Supply, Inc. (NYSE:SITE), Sibanye Gold Ltd (NYSE:SBGL), and Halozyme Therapeutics, Inc. (NASDAQ:HALO). This group of stocks' market caps match WDFC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LM,17,193646,-1 SITE,12,42960,1 SBGL,12,54954,0 HALO,18,73646,2 Average,14.75,91302,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $91 million. That figure was $137 million in WDFC's case. Halozyme Therapeutics, Inc. (NASDAQ:HALO) is the most popular stock in this table. On the other hand SiteOne Landscape Supply, Inc. (NYSE:SITE) is the least popular one with only 12 bullish hedge fund positions. WD-40 Company (NASDAQ:WDFC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately WDFC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); WDFC investors were disappointed as the stock returned -3.8% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Morphic Holding IPO: What You Need To Know
A biotech with licensing agreements with some of the big-name pharma companies such asAbbVie Inc(NYSE:ABBV) andJohnson & Johnson(NYSE:JNJ)'s Janssen unit is testing the IPO waters this week.
IPO Terms
Waltham, Massachusetts-basedMorphic Holdingis offering 5 million shares in an IPO, with the price per share estimated in the range of $14-$16, according to itsS-1/A filingdated June 14.
The size of the offering would be $75 million, assuming it is priced at the mid-point of the estimated price range.
The company has applied for listing its shares on the Nasdaq under the ticker symbol MORF.
Jefferies, Cowen BMO Capital Markets and Wells Fargo Securities are the joint book-running managers for the offering.
The Company
Morphic, founded in August 2014, is a biopharma company developing a pipeline of oral small-molecule integrin therapeutics. Its Morphic integrin technology platform, or MInT Platform is used to develop novel product candidates designed to achieve the potency, high selectivity and pharmaceutical properties required for oral administration.
The company is advancing its preclinical pipeline, including:
• Lead wholly-owned program foralpha4beta7specific integrin inhibitors affecting inflammation, into clinical development for treating inflammatory bowel disease
• Its most product candidate, MORF-720 into clinical development for the treatment of idiopathic pulmonary fibrosis in collaboration with AbbVie
Morphic is planning to file an IND for itsalpha4beta7program and MORF-720 by the middle of 2020 and as early as the end of 2019, respectively.
The Finances
Morphic reported collaboration revenues of $3.36 million in fiscal year 2018 compared to no revenues in 2017. The company's net loss widened from $16.92 million to $23.83 million.
For the three months ended March, 2019, the company reported collaboration revenues of $6.07 million and a loss of $5.2 million.
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© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. |
Iran readies to breach uranium restrictions as confrontation with United States deepens
An Iranian technician working at the Uranium Conversion Facility just outside the city of Isfahan in 2007 - AP The confrontation between Iran and the United States is expected to escalate on Thursday as Iran warned it is ready to violate its commitments to the 2015 nuclear deal for the first time. Iran has said it will accumulate enough low-enriched uranium to breach the 300 kilogram limit set in the 2015 nuclear deal unless European countries find a way to help it side-step US sanctions. It said earlier this month that it expects to reach that level on Thursday. Majid Takht Ravanchi, Iran's ambassador to the United Nations, told the Security Council on Wednesday evening that US actions had "rendered the JCPOA almost fully ineffective, and that "Iran alone cannot, shall not and will not take all of the burdens" to preserve it. The deadline comes after the two country's leaders both promised they would not back down in a confrontation that has led them to the brink of war. Ayatollah Ali Khamenei said Iran would not bow to US pressure Credit: Morteza Nikoubazl/REUTERS On Wednesday Donald Trump outlined his plans for a potential military strike on the Islamic Republic, saying any conflict would be short lived and would not involve ground troops. Asked if a war was brewing, he said in an interview on Fox: "I hope we don't but we're in a very strong position if something should happen." "I'm not talking boots on the ground ... I'm just saying if something would happen, it wouldn't last very long." Hours earlier, Iran's supreme leader said his country would not bow to US pressure. In his first public comments since he was placed under US sanctions by Mr Trump, Ayatollah Ali Khamenei said Iran “would not give up” in the face of US sanctions which have caused a dramatic economic slowdown in the country over the past year. "The graceful Iranian nation has been accused and insulted by the world's most vicious regime, the US, which is a source of wars, conflicts and plunder. The Iranian nation won't give up over such insults," he said in a speech to a crowd in Tehran. Story continues Donald Trump ruled out putting "boots on the ground" in the event of war with Iran Credit: Alex Wong/Getty Images North America Ayatollah Khamenei, who is Iran’s head of state and wields ultimate control over defence and foreign policy, was placed under US treasury sanctions on Monday. Mr Trump pulled the United States out of an agreement with Britain, France, Germany, Russia, China, and the EU that offered Iran sanctions relief in exchange for limiting its nuclear program last year. He has imposed punishing sanctions in bid to force Tehran to accept a more restrictive deal. Iran has responded by threatening to abandon some of its own obligations under the agreement unless European signatories find a way to help it access the economic benefits it was promised. It initially set a July 7 deadline, but then said it had brought forward its plans breach the uranium stockpile limit to June 27. The diplomatic crisis lurched towards war last week after the US and UK blamed Iran for attacking oil tankers in the Strait of Hormuz and Iran shot down a US surveillance drone. President of Iraq Barham Salih told both Iran and the US to "cool it" Credit: Frank Augstein/AP Britain, France, and Germany are expected to announce the launch of a financial mechanism designed to help European companies trade with Iran without facing US sanctions on Friday. The financial vehicle, known as INSTEX, has been in preparation for nearly six months. European diplomats flew to Tehran last week for three days of talks on the technical details. It was unclear on Wednesday whether making it operational will be enough to persuade Iran not to breach its nuclear deal commitments. The remaining members of the nuclear deal will also meet in Vienna on Friday to discuss the implications of an Iranian violation of its obligations. The president of Iraq warned on Wednesday that he would not allow his country to become a theatre in a US-Iranian proxy war. Bahim Salih said he had warned both the US and its allies and Iran that Iraq would not allow its territory to be used to attack the other side. "We are asking everybody to cool it down," Mr Salih said in a speech in London. "Enough is enough. We cannot afford another war, and we are not shy about saying so because we have tried it before. You start a war and it is very difficult to end it." Iraq is home to both US military bases and powerful Iranian-backed militia groups. US officials have blamed Iranian proxies for a string of mortar and rocket attacks on US facilities there in recent weeks. |
What Investors Should Know About The Walt Disney Company's (NYSE:DIS) Financial Strength
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The Walt Disney Company (NYSE:DIS), a large-cap worth US$252b, comes to mind for investors seeking a strong and reliable stock investment. Market participants who are conscious of risk tend to search for large firms, attracted by the prospect of varied revenue sources and strong returns on capital. But, its financial health remains the key to continued success. This article will examine Walt Disney’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysisinto DIS here.
See our latest analysis for Walt Disney
Over the past year, DIS has ramped up its debt from US$25b to US$57b – this includes long-term debt. With this increase in debt, DIS's cash and short-term investments stands at US$10b to keep the business going. Moreover, DIS has generated US$14b in operating cash flow during the same period of time, leading to an operating cash to total debt ratio of 24%, meaning that DIS’s debt is appropriately covered by operating cash.
Looking at DIS’s US$44b in current liabilities, it seems that the business may not have an easy time meeting these commitments with a current assets level of US$34b, leading to a current ratio of 0.77x. The current ratio is the number you get when you divide current assets by current liabilities.
With a debt-to-equity ratio of 54%, DIS can be considered as an above-average leveraged company. This is common amongst large-cap companies because debt can often be a less expensive alternative to equity due to tax deductibility of interest payments. Since large-caps are seen as safer than their smaller constituents, they tend to enjoy lower cost of capital. We can assess the sustainability of DIS’s debt levels to the test by looking at how well interest payments are covered by earnings. Net interest should be covered by earnings before interest and tax (EBIT) by at least three times to be safe. For DIS, the ratio of 25.05x suggests that interest is comfortably covered. It is considered a responsible and reassuring practice to maintain high interest coverage, which makes DIS and other large-cap investments thought to be safe.
DIS’s cash flow coverage indicates it could improve its operating efficiency in order to meet demand for debt repayments should unforeseen events arise. Furthermore, its lack of liquidity raises questions over current asset management practices for the large-cap. I admit this is a fairly basic analysis for DIS's financial health. Other important fundamentals need to be considered alongside. You should continue to research Walt Disney to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for DIS’s future growth? Take a look at ourfree research report of analyst consensusfor DIS’s outlook.
2. Valuation: What is DIS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether DIS is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Hedge Funds Have Never Been This Bullish On Urban Edge Properties (UE)
Is Urban Edge Properties (NYSE:UE) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
IsUrban Edge Properties (NYSE:UE)a buy here? Investors who are in the know are in a bullish mood. The number of long hedge fund bets inched up by 2 in recent months. Our calculations also showed that UE isn't among the30 most popular stocks among hedge funds.UEwas in 14 hedge funds' portfolios at the end of the first quarter of 2019. There were 12 hedge funds in our database with UE holdings at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to view the fresh hedge fund action encompassing Urban Edge Properties (NYSE:UE).
Heading into the second quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the fourth quarter of 2018. By comparison, 10 hedge funds held shares or bullish call options in UE a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Jim Simons'sRenaissance Technologieshas the biggest position in Urban Edge Properties (NYSE:UE), worth close to $17.6 million, corresponding to less than 0.1%% of its total 13F portfolio. Coming in second is Clint Carlson ofCarlson Capital, with a $16.2 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish encompass Dmitry Balyasny'sBalyasny Asset Management, Israel Englander'sMillennium Managementand Ken Griffin'sCitadel Investment Group.
Now, some big names have been driving this bullishness.Carlson Capital, managed by Clint Carlson, created the largest position in Urban Edge Properties (NYSE:UE). Carlson Capital had $16.2 million invested in the company at the end of the quarter. Benjamin A. Smith'sLaurion Capital Managementalso initiated a $5.9 million position during the quarter. The only other fund with a new position in the stock is Paul Tudor Jones'sTudor Investment Corp.
Let's now take a look at hedge fund activity in other stocks similar to Urban Edge Properties (NYSE:UE). We will take a look at CenterState Bank Corporation (NASDAQ:CSFL), Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN), Independent Bank Corp (NASDAQ:INDB), and PolyOne Corporation (NYSE:POL). All of these stocks' market caps match UE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CSFL,16,136212,-4 BHVN,33,386094,11 INDB,6,7051,-3 POL,23,151231,4 Average,19.5,170147,2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $170 million. That figure was $97 million in UE's case. Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) is the most popular stock in this table. On the other hand Independent Bank Corp (NASDAQ:INDB) is the least popular one with only 6 bullish hedge fund positions. Urban Edge Properties (NYSE:UE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately UE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); UE investors were disappointed as the stock returned -4.3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Limelight Networks, Inc. (LLNW)
World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients' money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It's not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It's also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Limelight Networks, Inc. (NASDAQ:LLNW)was in 12 hedge funds' portfolios at the end of the first quarter of 2019. LLNW shareholders have witnessed a decrease in hedge fund sentiment lately. There were 15 hedge funds in our database with LLNW positions at the end of the previous quarter. Our calculations also showed that llnw isn't among the30 most popular stocks among hedge funds.
In the 21st century investor’s toolkit there are dozens of methods stock traders employ to appraise their holdings. Two of the most under-the-radar methods are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the elite investment managers can outperform their index-focused peers by a healthy amount (see the details here).
We're going to take a glance at the recent hedge fund action encompassing Limelight Networks, Inc. (NASDAQ:LLNW).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in LLNW a year ago. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
The largest stake in Limelight Networks, Inc. (NASDAQ:LLNW) was held byCannell Capital, which reported holding $9 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $7.7 million position. Other investors bullish on the company included AQR Capital Management, Arrowstreet Capital, and Marshall Wace LLP.
Seeing as Limelight Networks, Inc. (NASDAQ:LLNW) has faced falling interest from hedge fund managers, it's easy to see that there was a specific group of fund managers who sold off their positions entirely heading into Q3. It's worth mentioning that Andrew Feldstein and Stephen Siderow'sBlue Mountain Capitalcut the largest position of the "upper crust" of funds tracked by Insider Monkey, totaling close to $0.2 million in stock, and Matthew Hulsizer's PEAK6 Capital Management was right behind this move, as the fund said goodbye to about $0.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 3 funds heading into Q3.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Limelight Networks, Inc. (NASDAQ:LLNW) but similarly valued. We will take a look at Simulations Plus, Inc. (NASDAQ:SLP), Carrols Restaurant Group, Inc. (NASDAQ:TAST), Digimarc Corp (NASDAQ:DMRC), and Hingham Institution for Savings (NASDAQ:HIFS). This group of stocks' market caps are closest to LLNW's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SLP,6,20658,1 TAST,19,109115,2 DMRC,3,33204,-1 HIFS,1,4077,0 Average,7.25,41764,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $40 million in LLNW's case. Carrols Restaurant Group, Inc. (NASDAQ:TAST) is the most popular stock in this table. On the other hand Hingham Institution for Savings (NASDAQ:HIFS) is the least popular one with only 1 bullish hedge fund positions. Limelight Networks, Inc. (NASDAQ:LLNW) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately LLNW wasn't nearly as popular as these 20 stocks and hedge funds that were betting on LLNW were disappointed as the stock returned -11.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About American Assets Trust, Inc (AAT)
How do we determine whether American Assets Trust, Inc (NYSE:AAT) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Hedge fund interest inAmerican Assets Trust, Inc (NYSE:AAT)shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare AAT to other stocks including WesBanco, Inc. (NASDAQ:WSBC), Cal-Maine Foods Inc (NASDAQ:CALM), and SeaWorld Entertainment Inc (NYSE:SEAS) to get a better sense of its popularity.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to take a peek at the new hedge fund action regarding American Assets Trust, Inc (NYSE:AAT).
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. By comparison, 15 hedge funds held shares or bullish call options in AAT a year ago. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jeffrey Furber'sAEW Capital Managementhas the most valuable position in American Assets Trust, Inc (NYSE:AAT), worth close to $81.8 million, comprising 2.3% of its total 13F portfolio. Coming in second isBalyasny Asset Management, led by Dmitry Balyasny, holding a $13.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism include Noam Gottesman'sGLG Partners, Israel Englander'sMillennium Managementand Jim Simons'sRenaissance Technologies.
Because American Assets Trust, Inc (NYSE:AAT) has witnessed a decline in interest from the aggregate hedge fund industry, logic holds that there were a few fund managers that decided to sell off their positions entirely by the end of the third quarter. At the top of the heap, Paul Marshall and Ian Wace'sMarshall Wace LLPsaid goodbye to the biggest investment of the 700 funds watched by Insider Monkey, worth close to $2.6 million in call options, and Matthew Hulsizer's PEAK6 Capital Management was right behind this move, as the fund sold off about $0.8 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks similar to American Assets Trust, Inc (NYSE:AAT). We will take a look at WesBanco, Inc. (NASDAQ:WSBC), Cal-Maine Foods Inc (NASDAQ:CALM), SeaWorld Entertainment Inc (NYSE:SEAS), and Bottomline Technologies (de), Inc. (NASDAQ:EPAY). This group of stocks' market values are similar to AAT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WSBC,8,48499,3 CALM,16,170156,-2 SEAS,27,774791,-2 EPAY,15,100438,-2 Average,16.5,273471,-0.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $273 million. That figure was $115 million in AAT's case. SeaWorld Entertainment Inc (NYSE:SEAS) is the most popular stock in this table. On the other hand WesBanco, Inc. (NASDAQ:WSBC) is the least popular one with only 8 bullish hedge fund positions. American Assets Trust, Inc (NYSE:AAT) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on AAT, though not to the same extent, as the stock returned 4.6% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Deutsche Bank Aktiengesellschaft (DB)
The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Deutsche Bank Aktiengesellschaft (NYSE:DB).
Deutsche Bank Aktiengesellschaft (NYSE:DB)has seen a decrease in activity from the world's largest hedge funds recently. Our calculations also showed that DB isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to view the key hedge fund action surrounding Deutsche Bank Aktiengesellschaft (NYSE:DB).
At the end of the first quarter, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards DB over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,Hudson Executive Capitalwas the largest shareholder of Deutsche Bank Aktiengesellschaft (NYSE:DB), with a stake worth $528.2 million reported as of the end of March. Trailing Hudson Executive Capital was Cerberus Capital Management, which amassed a stake valued at $505.2 million. Masters Capital Management, Granite Point Capital, and OZ Management were also very fond of the stock, giving the stock large weights in their portfolios.
Because Deutsche Bank Aktiengesellschaft (NYSE:DB) has witnessed declining sentiment from the entirety of the hedge funds we track, it's easy to see that there was a specific group of hedge funds that slashed their full holdings by the end of the third quarter. At the top of the heap, Jeffrey Gendell'sTontine Asset Managementdropped the biggest investment of all the hedgies tracked by Insider Monkey, valued at an estimated $16 million in stock. Peter Rathjens, Bruce Clarke and John Campbell's fund,Arrowstreet Capital, also said goodbye to its stock, about $5.4 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds by the end of the third quarter.
Let's go over hedge fund activity in other stocks similar to Deutsche Bank Aktiengesellschaft (NYSE:DB). These stocks are W.W. Grainger, Inc. (NYSE:GWW), Korea Electric Power Corporation (NYSE:KEP), Diamondback Energy Inc (NASDAQ:FANG), and Tenaris S.A. (NYSE:TS). This group of stocks' market values resemble DB's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GWW,29,349124,6 KEP,10,37936,1 FANG,47,1854682,3 TS,15,775378,2 Average,25.25,754280,3 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 25.25 hedge funds with bullish positions and the average amount invested in these stocks was $754 million. That figure was $1074 million in DB's case. Diamondback Energy Inc (NASDAQ:FANG) is the most popular stock in this table. On the other hand Korea Electric Power Corporation (NYSE:KEP) is the least popular one with only 10 bullish hedge fund positions. Deutsche Bank Aktiengesellschaft (NYSE:DB) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately DB wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); DB investors were disappointed as the stock returned -10.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Armstrong Flooring, Inc. (AFI) A Good Stock To Buy?
We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article, we look at what those funds think of Armstrong Flooring, Inc. (NYSE:AFI) based on that data.
Armstrong Flooring, Inc. (NYSE:AFI)has experienced a decrease in hedge fund interest lately.AFIwas in 12 hedge funds' portfolios at the end of March. There were 13 hedge funds in our database with AFI positions at the end of the previous quarter. Our calculations also showed that afi isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to review the new hedge fund action encompassing Armstrong Flooring, Inc. (NYSE:AFI).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards AFI over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Armstrong Flooring, Inc. (NYSE:AFI) was held byValueAct Capital, which reported holding $62.8 million worth of stock at the end of March. It was followed by Nantahala Capital Management with a $27.6 million position. Other investors bullish on the company included GAMCO Investors, Ancora Advisors, and D E Shaw.
Judging by the fact that Armstrong Flooring, Inc. (NYSE:AFI) has experienced a decline in interest from hedge fund managers, logic holds that there were a few money managers that decided to sell off their full holdings last quarter. It's worth mentioning that Noam Gottesman'sGLG Partnerssaid goodbye to the biggest investment of all the hedgies watched by Insider Monkey, comprising close to $2.6 million in stock, and Peter Algert and Kevin Coldiron's Algert Coldiron Investors was right behind this move, as the fund cut about $1.8 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds last quarter.
Let's also examine hedge fund activity in other stocks similar to Armstrong Flooring, Inc. (NYSE:AFI). We will take a look at Constellation Pharmaceuticals, Inc. (NASDAQ:CNST), Carriage Services, Inc. (NYSE:CSV), Civeo Corporation (NYSE:CVEO), and MediciNova, Inc. (NASDAQ:MNOV). This group of stocks' market values match AFI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CNST,8,60492,0 CSV,8,33703,-1 CVEO,14,146012,1 MNOV,3,3585,1 Average,8.25,60948,0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $142 million in AFI's case. Civeo Corporation (NYSE:CVEO) is the most popular stock in this table. On the other hand MediciNova, Inc. (NASDAQ:MNOV) is the least popular one with only 3 bullish hedge fund positions. Armstrong Flooring, Inc. (NYSE:AFI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately AFI wasn't nearly as popular as these 20 stocks and hedge funds that were betting on AFI were disappointed as the stock returned -21.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Titan Machinery Inc. (TITN) A Good Stock To Buy?
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Titan Machinery Inc. (NASDAQ:TITN).
Titan Machinery Inc. (NASDAQ:TITN)investors should be aware of a decrease in hedge fund interest lately. Our calculations also showed that TITN isn't among the30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let's take a look at the recent hedge fund action encompassing Titan Machinery Inc. (NASDAQ:TITN).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position in TITN a year ago. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Among these funds,Rutabaga Capital Managementheld the most valuable stake in Titan Machinery Inc. (NASDAQ:TITN), which was worth $4.5 million at the end of the first quarter. On the second spot was Point72 Asset Management which amassed $3.1 million worth of shares. Moreover, Point72 Asset Management, Two Sigma Advisors, and Renaissance Technologies were also bullish on Titan Machinery Inc. (NASDAQ:TITN), allocating a large percentage of their portfolios to this stock.
Seeing as Titan Machinery Inc. (NASDAQ:TITN) has witnessed bearish sentiment from hedge fund managers, we can see that there lies a certain "tier" of hedgies who sold off their full holdings heading into Q3. At the top of the heap, Paul Marshall and Ian Wace'sMarshall Wace LLPdumped the largest position of all the hedgies tracked by Insider Monkey, totaling about $1.6 million in stock. Andrew Feldstein and Stephen Siderow's fund,Blue Mountain Capital, also dumped its stock, about $0.8 million worth. These moves are important to note, as aggregate hedge fund interest fell by 3 funds heading into Q3.
Let's go over hedge fund activity in other stocks similar to Titan Machinery Inc. (NASDAQ:TITN). We will take a look at Artesian Resources Corporation (NASDAQ:ARTNA), Tuscan Holdings Corp. (NASDAQ:THCB), PrimeEnergy Resources Corporation (NASDAQ:PNRG), and Guaranty Bancshares, Inc. (NASDAQ:GNTY). All of these stocks' market caps resemble TITN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARTNA,3,17145,-2 THCB,8,35955,8 PNRG,2,801,2 GNTY,4,8967,0 Average,4.25,15717,2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 4.25 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $18 million in TITN's case. Tuscan Holdings Corp. (NASDAQ:THCB) is the most popular stock in this table. On the other hand PrimeEnergy Resources Corporation (NASDAQ:PNRG) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Titan Machinery Inc. (NASDAQ:TITN) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on TITN as the stock returned 14.7% during the same period and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published atInsider Monkey.
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Most States Still Enforce Noncompete Agreements—And It's Stifling Innovation
There’s a growing national movement against noncompete agreements. Jay Inslee, governor of Washington and 2020 presidential candidate,signed a law in Maybarring noncompetes for anyone who makes less than $100,000 annually, and in June,Maryland banned themfor low-wage workers. Additional states, including New Hampshire and Vermont, are considering bills that would significantly weaken these contracts, and the momentum even extends to Capitol Hill, where three senatorsrecently introduced a billthat would ban noncompetes nationwide.
Unfortunately, noncompete agreements are still pervasive. About 30 million U.S. workers, or roughly one in five, are bound by them, according tothe U.S. Treasury. And as the salary scale climbs, so does the percentage of those who have signed one. Noncompetes cover about 14% of workers making less than $40,000 and nearly 50% of those making more than $150,000, saysa 2019 reportfrom the Economic Innovation Institute. OnlyCalifornia, North Dakota, and Oklahomaforbid enforcing them altogether, and in nearly half of the states, these agreements can prevent even laid-off employees from working in their industry for a year or more.
In Massachusetts, where I’ve been a longtime entrepreneur in the enterprise technology infrastructure industry, Governor Charlie Bakersigned a law last yearthat weakened noncompete agreements. But reforming noncompetes is not enough—these agreements should be eliminated altogether. Noncompetes harm employees, damage the companies who require them, and stifle innovation.
Innovation thrives in a culture of achievement, when people are free to be bold and creative. Noncompetes, on the other hand, create a culture of risk aversion where people may make career decisions based on fear. For example, candidates might not take a job offer due to concerns about signing a noncompete, or employees may not even apply for other positions, because they worry their current employer could file suit against them.
Moreover, employees restrained by these agreements can’t leave to join a startup or create their own company in their area of expertise. In fact,according to the Economic Innovation Institute, in states where noncompetes are enforced, startups are less successful, and employees earn lower wages than in states (like California) where they aren’t enforced.
Today’s employees are highly mobile. Baby boomers, under the age of 48, held nearly 12 different jobs,according to the Bureau of Labor Statistics, andGallup foundthat more than one-fifth of Millennials changed jobs just in the last year. Noncompete agreements threaten to lock people into a single company, which can drive talent away, and make it harder to hire the people it needs. When Michigan reversed its ban on noncompetes in 1985, a2014 studyfound that the state subsequently suffered a “brain drain” of knowledge workers to states that didn’t enforce them.
While employers use noncompetes for a variety of reasons—to safeguard trade secrets, protect customer relationships, and retain key employees—in truth, there are already separate laws safeguarding intellectual property and customer relationships. Employers, for instance, can have employees sign nondisclosure agreements to protect IP and trade secrets, while nonsolicitation agreements can prevent former employees from poaching customers. A noncompete is simply unnecessary—it doesn’t provide extra protection, it just hampers an employee’s ability to maintain a competitive edge in their field.
As for retaining key employees through noncompetes, those employers who stymie employee mobility with these contracts demonstrate an unwillingness to change with the times. Reduced mobility for workers doesn’t just shrink workers’ job prospects; it also reduces an employer’s potential talent pool. And even when noncompetes are modified or weakened, companies that retain them show that they doubt their ability to retain or compete for talent on a level playing field. That’s not a corporate culture that will fare well in today’s highly competitive job market.
More fundamentally, noncompetes obstruct fairness. Employees should have the right to find work that’s fulfilling and affords them the greatest opportunity to achieve. There’s no good reason to prevent someone from earning a living by using their industry-specific skills and experience. This is even more apparent in sectors outside of technology, where noncompetes can put people out of work for a year or more, even if they are let go without cause.
Ultimately, there are better ways to retain a company’s workforce—such as providing a good work-life balance, strong mentorship programs, career counseling, and opportunities for professional development—without resorting to contracts that both demotivate employees and limit an organization’s ability to innovate.
Ellen Rubin is CEO and co-founder ofClearSky Data.
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Is K-Bro Linen Inc.'s (TSE:KBL) High P/E Ratio A Problem For Investors?
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This article is written for those who want to get better at using price to earnings ratios (P/E ratios). To keep it practical, we'll show how K-Bro Linen Inc.'s (TSE:KBL) P/E ratio could help you assess the value on offer. Looking at earnings over the last twelve months,K-Bro Linen has a P/E ratio of 70.19. That is equivalent to an earnings yield of about 1.4%.
View our latest analysis for K-Bro Linen
Theformula for P/Eis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for K-Bro Linen:
P/E of 70.19 = CA$40.31 ÷ CA$0.57 (Based on the trailing twelve months to March 2019.)
A higher P/E ratio means that investors are payinga higher pricefor each CA$1 of company earnings. That is not a good or a bad thingper se, but a high P/E does imply buyers are optimistic about the future.
When earnings fall, the 'E' decreases, over time. That means unless the share price falls, the P/E will increase in a few years. A higher P/E should indicate the stock is expensive relative to others -- and that may encourage shareholders to sell.
K-Bro Linen's earnings per share grew by -8.9% in the last twelve months. But earnings per share are down 16% per year over the last five years.
The P/E ratio essentially measures market expectations of a company. As you can see below, K-Bro Linen has a much higher P/E than the average company (17.4) in the commercial services industry.
That means that the market expects K-Bro Linen will outperform other companies in its industry. Clearly the market expects growth, but it isn't guaranteed. So further research is always essential. I often monitordirector buying and selling.
It's important to note that the P/E ratio considers the market capitalization, not the enterprise value. That means it doesn't take debt or cash into account. Hypothetically, a company could reduce its future P/E ratio by spending its cash (or taking on debt) to achieve higher earnings.
While growth expenditure doesn't always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores.
K-Bro Linen's net debt is 15% of its market cap. It would probably deserve a higher P/E ratio if it was net cash, since it would have more options for growth.
K-Bro Linen's P/E is 70.2 which suggests the market is more focussed on the future opportunity rather than the current level of earnings. With modest debt relative to its size, and modest earnings growth, the market is likely expecting sustained long-term growth, if not a near-term improvement.
Investors have an opportunity when market expectations about a stock are wrong. People often underestimate remarkable growth -- so investors can make money when fast growth is not fully appreciated. So thisfreevisual report on analyst forecastscould hold the key to an excellent investment decision.
You might be able to find a better buy than K-Bro Linen. If you want a selection of possible winners, check out thisfreelist of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings).
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Did Hedge Funds Drop The Ball On Adverum Biotechnologies, Inc. (ADVM) ?
Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors' consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETF by more than 6 percentage points so far this year. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Adverum Biotechnologies, Inc. (NASDAQ:ADVM) from the perspective of those elite funds.
Adverum Biotechnologies, Inc. (NASDAQ:ADVM)was in 12 hedge funds' portfolios at the end of the first quarter of 2019. ADVM has experienced a decrease in hedge fund sentiment recently. There were 17 hedge funds in our database with ADVM holdings at the end of the previous quarter. Our calculations also showed that advm isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's check out the fresh hedge fund action surrounding Adverum Biotechnologies, Inc. (NASDAQ:ADVM).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from the previous quarter. On the other hand, there were a total of 28 hedge funds with a bullish position in ADVM a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Adverum Biotechnologies, Inc. (NASDAQ:ADVM) was held byRenaissance Technologies, which reported holding $19.9 million worth of stock at the end of March. It was followed by Adage Capital Management with a $15.7 million position. Other investors bullish on the company included OrbiMed Advisors, Water Street Capital, and Point72 Asset Management.
Seeing as Adverum Biotechnologies, Inc. (NASDAQ:ADVM) has witnessed a decline in interest from hedge fund managers, it's safe to say that there is a sect of funds who sold off their positions entirely in the third quarter. Intriguingly, Joseph Edelman'sPerceptive Advisorsdropped the largest position of the "upper crust" of funds followed by Insider Monkey, comprising close to $1 million in stock. Peter Algert and Kevin Coldiron's fund,Algert Coldiron Investors, also cut its stock, about $0.3 million worth. These moves are interesting, as aggregate hedge fund interest fell by 5 funds in the third quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Adverum Biotechnologies, Inc. (NASDAQ:ADVM) but similarly valued. We will take a look at Endeavour Silver Corp. (NYSE:EXK), Sterling Construction Company, Inc. (NASDAQ:STRL), Utah Medical Products, Inc. (NASDAQ:UTMD), and Daseke, Inc. (NASDAQ:DSKE). This group of stocks' market caps are closest to ADVM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EXK,7,19804,0 STRL,15,50586,4 UTMD,8,32509,0 DSKE,9,9685,0 Average,9.75,28146,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $52 million in ADVM's case. Sterling Construction Company, Inc. (NASDAQ:STRL) is the most popular stock in this table. On the other hand Endeavour Silver Corp. (NYSE:EXK) is the least popular one with only 7 bullish hedge fund positions. Adverum Biotechnologies, Inc. (NASDAQ:ADVM) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on ADVM as the stock returned 119.5% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Apple Hospitality REIT Inc (APLE)
Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren't very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. This year hedge funds' top 20 stock picks easily bested the broader market, at 18.7% compared to 12.1%, despite there being a few duds in there like Berkshire Hathaway (even their collective wisdom isn't perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.
IsApple Hospitality REIT Inc (NYSE:APLE)ready to rally soon? Money managers are becoming more confident. The number of long hedge fund bets improved by 2 lately. Our calculations also showed that APLE isn't among the30 most popular stocks among hedge funds.APLEwas in 13 hedge funds' portfolios at the end of March. There were 11 hedge funds in our database with APLE positions at the end of the previous quarter.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_30621" align="aligncenter" width="487"]
Cliff Asness of AQR Capital Management[/caption]
Let's view the recent hedge fund action encompassing Apple Hospitality REIT Inc (NYSE:APLE).
At Q1's end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in APLE over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Renaissance Technologiesheld the most valuable stake in Apple Hospitality REIT Inc (NYSE:APLE), which was worth $55.6 million at the end of the first quarter. On the second spot was Citadel Investment Group which amassed $7.9 million worth of shares. Moreover, Forward Management, Millennium Management, and D E Shaw were also bullish on Apple Hospitality REIT Inc (NYSE:APLE), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves.AQR Capital Management, managed by Cliff Asness, assembled the most valuable position in Apple Hospitality REIT Inc (NYSE:APLE). AQR Capital Management had $0.6 million invested in the company at the end of the quarter. David Harding'sWinton Capital Managementalso made a $0.3 million investment in the stock during the quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Apple Hospitality REIT Inc (NYSE:APLE) but similarly valued. These stocks are Churchill Downs Incorporated (NASDAQ:CHDN), Umpqua Holdings Corp (NASDAQ:UMPQ), Graham Holdings Co (NYSE:GHC), and Trex Company, Inc. (NYSE:TREX). This group of stocks' market caps are closest to APLE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CHDN,29,519547,3 UMPQ,20,218914,0 GHC,15,573233,-4 TREX,20,82364,6 Average,21,348515,1.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $349 million. That figure was $88 million in APLE's case. Churchill Downs Incorporated (NASDAQ:CHDN) is the most popular stock in this table. On the other hand Graham Holdings Co (NYSE:GHC) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Apple Hospitality REIT Inc (NYSE:APLE) is even less popular than GHC. Hedge funds dodged a bullet by taking a bearish stance towards APLE. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately APLE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); APLE investors were disappointed as the stock returned 0% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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US STOCKS-Wall St gains on tech rally, trade hopes rekindled
(Updates to late afternoon; changes dateline, byline) * Trade hopes gain traction ahead of G20 summit * Micron jumps after upbeat forecasts; chip stocks rise * Crude prices lift energy stocks * General Mills falls on disappointing sales * Indexes up: Dow 0.20%, S&P 500 0.10%, Nasdaq 0.46% By Stephen Culp NEW YORK, June 26 (Reuters) - Technology shares led the S&P 500 and the Nasdaq higher on Wednesday after remarks by Treasury Secretary Steven Mnuchin rekindled hopes for a de-escalation of U.S.-China trade tensions and brought buyers back from the sidelines. All three major U.S. stock indexes were up, though off session highs. Trade-sensitive industrial stocks, led by Boeing Co, provided the biggest lift to the Dow. The S&P 500 and the Nasdaq were set to snap three-day losing streaks, which were driven in part by increasing pessimism as to whether a planned meeting between President Donald Trump and China's president, Xi Jinping, at the upcoming Group of 20 summit in Japan would yield any progress in the two country's protracted tariff dispute. But hopes for a way forward were raised when Mnuchin said in an interview on CNBC, "We were about 90% of the way there (with a deal), and I think there's a path to complete this." Trump later said it was "absolutely possible" to avoid imposing additional tariffs on imported Chinese goods, but said he was "very happy where we are now." "The markets are easily led by trade news," said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. "The market anticipates that something positive will come out of the G20 meeting this weekend." The Dow Jones Industrial Average rose 53.11 points, or 0.2%, to 26,601.33, the S&P 500 gained 2.89 points, or 0.10%, to 2,920.27, and the Nasdaq Composite added 36.20 points, or 0.46%, to 7,920.92. A rise in crude prices boosted energy stocks . Energy and tech companies were the biggest percentage gainers among the 11 major sectors of the S&P 500. Story continues Chipmakers led the tech rally. The Philadelphia SE Semiconductor index rose 3.4% after Micron Technology Inc posted upbeat results and forecast a recovery in chip demand. Micron's shares jumped 13.4%. Apple Inc shares were up 2.1% after the iPhone maker confirmed that it bought self-driving startup Drive.ai and after Trump suggested in an interview that the European Union was out of line with its lawsuits against U.S. tech firms, saying that the United States was the one that should be taking action. EU antitrust regulators on Wednesday hit Broadcom with demands that the chipmaker drop its exclusivity clauses with TV and modem makers as part of its ongoing investigation. Nevertheless, Broadcom's shares were up 2.0% General Mills Inc was among the biggest percentage losers on the S&P 500, dropping 4.2% after the packaged food company missed quarterly sales estimates, hit by lower snacks demand in North America. In economic news, new orders for non-defense capital goods rose more than economists expected in May, suggesting some stabilization in business spending, which had shown signs of weakness amid trade jitters and bloated inventories. But overall orders for durable goods dropped, driven by a 28.2% plunge in non-defense aircraft orders, partly due to Boeing's move to cut production of its troubled 737 MAX aircraft. Advancing issues outnumbered declining ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.11-to-1 ratio favored advancers. The S&P 500 posted seven new 52-week highs and four new lows; the Nasdaq Composite recorded 18 new highs and 81 new lows. (Reporting by Stephen Culp Editing by Leslie Adler) |
Does Market Volatility Impact Saville Resources Inc.'s (CVE:SRE) Share Price?
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If you own shares in Saville Resources Inc. (CVE:SRE) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.
Some stocks are more sensitive to general market forces than others. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. A stock with a beta below one is either less volatile than the market, or more volatile but not corellated with the overall market. In comparison a stock with a beta of over one tends to be move in a similar direction to the market in the long term, but with greater changes in price.
Check out our latest analysis for Saville Resources
Looking at the last five years, Saville Resources has a beta of 0.91. The fact that this is well below 1 indicates that its share price movements haven't historically been very sensitive to overall market volatility. This means that -- if history is a guide -- buying the stock would reduce the impact of overall market volatility in many portfolios (depending on the beta of the portfolio, of course). Beta is worth considering, but it's also important to consider whether Saville Resources is growing earnings and revenue. You can take a look for yourself, below.
With a market capitalisation of CA$2.2m, Saville Resources is a very small company by global standards. It is quite likely to be unknown to most investors. Very small companies often have a low beta value because their share prices are not well correlated with market volatility. This could be because the price is reacting to company specific events. Alternatively, the shares may not be actively traded.
The Saville Resources doesn't usually show much sensitivity to the broader market. This could be for a variety of reasons. Typically, smaller companies have a low beta if their share price tends to move a lot due to company specific developments. Alternatively, an strong dividend payer might move less than the market because investors are valuing it for its income stream. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Saville Resources’s financial health and performance track record. I highly recommend you dive deeper by considering the following:
1. Financial Health: Are SRE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
2. Past Track Record: Has SRE been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look atthe free visual representations of SRE's historicalsfor more clarity.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How '80s LGBTQ band Bronski Beats haunting Smalltown Boy made a difference: It was very bold
Thirty-five years ago, director Bernard Rose lensed two very important music videos that shifted the needle of 80s queer culture. One was the original, wild, and widely banned version of Frankie Goes to Hollywoods controversial smash hit Relax, which took place in a Caligula-style S&M nightclub. But on the other end of the spectrum was Bronski Beats much grimmer depiction of a suburban teens gay-bashing and subsequent ostracization from his disapproving family, Smalltown Boy. Arguably, its that video that truly resonates today. It's a piece of work that I'm still very proud of, certainly, Rose tells Yahoo Entertainment in an interview commemorating both Pride Month and the groundbreaking Smalltown Boy videos anniversary. It was much quieter in its impact than Relax, but I think just as powerful in terms of the story it told. That was the good thing about it. The stark and narrative video, described by Rose as an un-glamorous silent movie (it features no flashy performance footage, dance sequences, or neon fashions like many other MTV videos of the era), depicts the titular character, played by the new wave trios openly gay frontman Jimmy Somerville, clumsily and unsuccessfully making a pass at a handsome jock at a local swimming pool; this unfortunately leads to him being vicious attacked in an alley by the jocks homophobic friends. When the bruised and bloodied Somerville is escorted home by police and basically outed to his outraged parents, he realizes he has no choice but to leave town for somewhere safer and more accepting. In the videos subtlest but most gut-punching scene that focuses solely on the two mens faltering hands, the father gives Somerville some cash for the one-way journey, but refuses a hug or handshake and cruelly turns away. I think it was a very common story, and I think that's a really interesting example of how to make a scene impactful just on the picture alone. I think it's a very common experience for people, and I think it even goes beyond the gay issue: people who just are rejected and thrown out like that, says Rose. That was Bronski Beat's message. They were going to point out the essential problems and oppressions involved in being gay at that time, which was you were quite likely to get beaten up somewhere, or thrown out by family. There's really no question that that's true. It is still true. In that sense, it was very bold. Story continues Jimmy Somerville faces a homophobic gang in Bronski Beat's "Smalltown Boy" video. (Photo: London Records) Rose says he got the job to direct Smalltown Boy because of the success of Relax, which sold a whopping 2 million copies in Britain alone and is still the seventh-best-selling single in U.K. history. But he says Bronski Beat weren't very keen on the Frankie Goes to Hollywood thing. They were giving me a hard time about it. I think that they [thought it was too] mainstream, upbeat, and commercial, and they had more of a message. But Rose does believe Frankies chart breakthrough paved the way for Smalltown Boy, Bronski Beats statement-making debut single (off thei r recently reissued Age of Consent album ), which eventually went to No. 3 in Britain. There were a lot of artists [in the 80s] who were gay but not open about it, like Boy George, George Michael, Freddie Mercury, Elton John these people we now think have always been out, but they were not out in 1984. And they were all at the height of their fame. Frankie Goes to Hollywood were really the first ones who came out and said, Well, yeah, we're gay. And it caused a shockwave, but it also didn't hurt them it did the opposite. It propelled [Relax] to being huge.
Bronski Beat were around before that happened, but their record came out after, and they were coming out into a market where the Frankie thing had already happened. So in a sense, I don't think it wasn't like their thunder was stolen, but they weren't the first. But I do think their approach was much more politicized and much more serious. Somerville wasnt a professional actor (and neither was the man who convincingly played the videos stern-faced policeman, London Records openly gay executive Colin Bell), but his nuanced performance was so gripping because, as Rose explains it, The story was very close to him. And we did it in real places, in a very low-key way. I just ran the scenes without too much rehearsal, so that they felt quite real, and then cut them to the music. There wasn't this thing of doing it to playback, which makes everything a bit artificial. This song, although obviously it's a dance record, the way it had a narrative to it, it was almost like a country & western record. It had a very specific story in the lyrics, and it seemed it would lend itself to doing it in a naturalistic way that was very un-music-video-y. Jimmy Somerville recalls his beating in Bronski Beat's "Smalltown Boy" video. (Photo: London Records) Rose also made the decision to not actually show Somervilles gay-bashing, mainly to conform to childrens TV standards in Britain (and thus get the airplay that the infamous Relax had understandably been denied). There was no way you could have shown [the attack], he says, but I think in a weird way, it's quite interesting that you don't see it because what you imagine is worse , really. Rose says the Smalltown Boy was warmly received, and he recalls 1984 being a progressive year for gay culture, as evidenced by the success of both Bronski Beat and Frankie Goes to Hollywood. I think things were moving in a much more open direction in '84, and in a way the Frankie thing was the height of it, where people were going, Oh, there's something wonderful and great and fun going on with all this, he says. But the good times would not last for long. Shortly after that, the mood changed. The whole AIDS thing came along, and everything was different. And then suddenly, the AIDS thing was tremendous to call it a backlash is an understatement. It was a holocaust. I think it was changing in '84, and I think things like Relax and Bronski Beat were at the forefront of that. There was actually a fair bit of public acceptance of it, and then it just went way the other direction, Rose elaborates. And people I knew at the time, [English filmmaker/artist] Derek Jarman being the most obvious example obviously Derek did die in 1993 [of an AIDS-related illness] but in early '80s, guys like Derek were just totally comfortable with being out and being pretty outrageous, being open about being promiscuous and having fun, doing all kinds of crazy stuff. And suddenly, people were suddenly so horrified by that, and it became so unacceptable. It was a cultural backlash as much as anything. Still, Smalltown Boy has endured; a skim of the videos mostly positive and grateful comments on YouTube shows how much its all-too-realistic storyline has connected over the past 35 years. I think if people recognize themselves onscreen and go, That happened to me, that's how I felt, then it helps people, says Rose. If people see themselves reflected, then they don't feel invisible. Thank you Andy and all those who shared stories via https://t.co/KNG1Crekbz #bronskibeat #theageofconsent pic.twitter.com/8L3d5xAI7z Bronski Beat (@bronskibeatband) November 13, 2018 However, its the feedback from his friend Jarman that really sticks with Rose. Derek was working in the same production company as me, and he was annoyed that I was making the video, because I think he wanted to [direct] it. And so, as soon as I had it finished, he was waiting for me by the video machine, saying, OK, put [the videotape] in. Let's have a look at it. He was definitely a gatekeeper, and he was going to view it harshly if he didn't approve. But he was very moved, and openly moved. And I thought, If Derek likes it, then it's OK. I was very pleased, Rose recalls. While the Smalltown Boy video is largely gray and depressing, it does end on a happy note, with Somerville being joined on a train by his friends (played by fellow openly gay Bronski Beat bandmates Larry Steinbachek and Steve Bronski) and setting off on their big-city adventure together. So, what does Rose, who went on to direct feature films like Candyman , Immortal Beloved , and Frankenstein , think would have happened in the music videos sequel? I assume that they would have formed a band and had a hit record, he smiles. Read more from Yahoo Entertainment: 'Rocketman' star Taron Egerton on gay storyline: 'I'm very proud that our movie puts it front and center' 'NSync's Lance Bass says 'music industry is still homophobic,' but its time for an openly gay boy band Queer rocker Bob Mould on coming out late in life: Why didn't I do this a little sooner? Pop prodigy MNEK on being a black gay role model: 'There's nothing wrong with being myself' The Drums Jonny Pierce: Being gay literally saved my life American Idol contestant Jeremiah Lloyd Harmons brave coming-out story: Everybody was a little jolted by how transparent I was being Follow Lyndsey on Facebook , Twitter , Instagram , Google+ , Amazon , Tumblr , Spotify . Want daily pop culture news delivered to your inbox? Sign up here for Yahoo Entertainment & Lifestyles newsletter. |
Is Diamond Fields Resources Inc.'s (CVE:DFR) ROE Of 34% Impressive?
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While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Diamond Fields Resources Inc. (CVE:DFR).
Diamond Fields Resources has a ROE of 34%, based on the last twelve months. That means that for every CA$1 worth of shareholders' equity, it generated CA$0.34 in profit.
Check out our latest analysis for Diamond Fields Resources
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Diamond Fields Resources:
34% = US$319k ÷ US$951k (Based on the trailing twelve months to March 2019.)
It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is the capital paid in by shareholders, plus any retained earnings. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the yearly profit. That means that the higher the ROE, the more profitable the company is. So, all else equal,investors should like a high ROE. Clearly, then, one can use ROE to compare different companies.
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. Pleasingly, Diamond Fields Resources has a superior ROE than the average (8.2%) company in the Metals and Mining industry.
That is a good sign. In my book, a high ROE almost always warrants a closer look. For example,I often check if insiders have been buying shares.
Virtually all companies need money to invest in the business, to grow profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the use of debt will improve the returns, but will not change the equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Shareholders will be pleased to learn that Diamond Fields Resources has not one iota of net debt! Its high ROE indicates the business is high quality, but the fact that this was achieved without leverage is veritably impressive. After all, with cash on the balance sheet, a company has a lot more optionality in good times and bad.
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. In my book the highest quality companies have high return on equity, despite low debt. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. Check the past profit growth by Diamond Fields Resources by looking at thisvisualization of past earnings, revenue and cash flow.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
A Key Player on Citi's IPO Team Has Left to Set Up His Own Shop
Not everyone stays in the Citi for the summer.
A Citi investment banker, who played a key role in a segment of the company’s IPO business, has left to start his own shop.
Neil Shah, managing director and head of alternative capital markets, left Citi in April to lead his own shop dubbed NJS Capital, sources with knowledge of the matter tellFortune. Shah declined to comment for this story.
At Citi, Shah was known for being a key part of the team that underwrites Special Purpose Acquisition Companies (SPACs), which raise funds through a initial public offering. The entity then acquires or merges with another business typically over the next 24 months.
Effectively, investors are writing a blank check to the SPAC sponsors—who are often former executives or private equity players—and invest in their ability to find an attractive target.
The model has grown increasingly popular in recent years, as a way for its sponsors to access funding in more liquid public markets and is arguably a cheaper and more streamlined way for the target to enter the public market.
SPACs grew to $10.8 billion raised in 2018, below the all-time high of $12.1 billion just before the Financial Crisis in 2007, perSPAC Research.
Citi has led the SPAC underwriting league table in recent years, placing first or second by deal volume since 2015. It has underwritten 21 deals, raising a total of $4.8 billion between 2015 to 2018. That included deals such as the $600 million raise for CF Corp, a blank check company backed by former Blackstone dealmaker, Chinh Chu, and Chairman of the Board forFidelity National Financial, William Foley. That firm later acquired U.S. annuities and life insurer, Fidelity & Guaranty Life in 2017.
Based on data from SPAC Research, Citi ranks about ninth year-to-date, and has another deal in the pipeline—the expected $600 million raise of Churchill Capital Corp. II—that will likely vault the bank to third year-to-date. That comes during a relatively robust year for SPACs so far—roughly $5.9 billion has been raised in the U.S.
“We have strong SPAC capabilities across all our equity capital markets,” a Citi spokesperson wrote in an email. “We have a broad team and deep talented bench and continue to lead SPACs.”
Stay tuned to see how Shah fares now that he’s out of the Citi.
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Is Stoneridge, Inc.’s (NYSE:SRI) Return On Capital Employed Any Good?
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Today we are going to look at Stoneridge, Inc. (NYSE:SRI) to see whether it might be an attractive investment prospect. In particular, we'll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business.
First of all, we'll work out how to calculate ROCE. Then we'll compare its ROCE to similar companies. Finally, we'll look at how its current liabilities affect its ROCE.
ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business. All else being equal, a better business will have a higher ROCE. In brief, it is a useful tool, but it is not without drawbacks. Author Edwin Whitingsaysto be careful when comparing the ROCE of different businesses, since 'No two businesses are exactly alike.'
The formula for calculating the return on capital employed is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for Stoneridge:
0.16 = US$68m ÷ (US$582m - US$157m) (Based on the trailing twelve months to March 2019.)
So,Stoneridge has an ROCE of 16%.
See our latest analysis for Stoneridge
ROCE is commonly used for comparing the performance of similar businesses. We can see Stoneridge's ROCE is around the 16% average reported by the Auto Components industry. Independently of how Stoneridge compares to its industry, its ROCE in absolute terms appears decent, and the company may be worthy of closer investigation.
When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. ROCE can be misleading for companies in cyclical industries, with returns looking impressive during the boom times, but very weak during the busts. ROCE is only a point-in-time measure. What happens in the future is pretty important for investors, so we have prepared afreereport on analyst forecasts for Stoneridge.
Liabilities, such as supplier bills and bank overdrafts, are referred to as current liabilities if they need to be paid within 12 months. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.
Stoneridge has total assets of US$582m and current liabilities of US$157m. Therefore its current liabilities are equivalent to approximately 27% of its total assets. Low current liabilities are not boosting the ROCE too much.
With that in mind, Stoneridge's ROCE appears pretty good. There might be better investments than Stoneridge out there,but you will have to work hard to find them. These promising businesses withrapidly growing earningsmight be right up your alley.
If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
gay man builds LGBTQ castle for rejected gay friend
A straight man decorated his Minecraft castle with rainbows for a gay friend whose parents didn't accept him. (Photo: Reddit/Cultist101) A gamer spent hours decorating a Minecraft castle with rainbows for a gay friend who was rejected by his family. Reddit user Cultist101, whose real name is Jordan, shared the renovation made for his friend Joel— an imposing-looking castle now embellished with rainbow flags and shooting skylights — on an r/gaming thread. “My friend that I have played Xbox with for many years recently came out as gay and got a lot of backlash from his family,” he wrote. “To show my support I did this to our castle in Minecraft. Many hours and duplications later it was finished.” Jordan’s workmanship impressed other gamers, who shared comments such as, “I would have to say that castle is fabulously gay,” and “F*** yeah dude, you are a great friend. Keep being awesome.” Another noted, “If you put the time into doing this with him, to support him in who he is, you're his real family.” And another, “Just whoa! I recently had my son come out and recently understood the impact stuff like this has on people. You my friend are a good person have a blessed life!” Finally, said a fan who was personally moved, “As a gay man, this made me shed a tear. Thank you, I hope your friendship lasts forever.” Jordan, 18, who lives in England, tells Yahoo Lifestyle that he and Joel have been online friends for four years since meeting through the video game Grand Theft Auto. Joel, 18, lives in Ireland but the two message via Facebook every day. “We have the same humor and love of music and games,” Jordan tells Yahoo Lifestyle. Joel told Jordan he was gay right before meeting with his parents. “He was anxious because he wasn’t sure how his parents would react,” he says. “Joel has always acted in a ‘straight’ fashion so I assume they never suspected he was gay.” Unfortunately, Joel’s parents didn’t approve and threatened to send him to live with his grandmother. “Joel was very sad but he hopes his parents will accept him in the future,” Jordan tells Yahoo Lifestyle. Jordan decided to add Pride flags and rainbow beams to their castle to “cheer him up.” Three hours later, he unveiled the remodeled castle to Joel. “He said, ‘Oh my god’ and paused for a good two minutes,” says Jordan. “It sounded like he was going to cry and he later said he shed a tear.” Story continues The friends will now expand Gay Pride throughout the surrounding medieval city, adding rainbow pride flags and stylizing the local inns. As Jordan tells Yahoo Lifestyle, “We want it to look more gay and fabulous.” Read more from Yahoo Lifestyle: Vintage clothing store owner calls police on black man who objected to rebel flag vest Gay bar owner's alleged Facebook posts threaten his new business: 'I hate Israel' Parents pull 650 children from school to protest LGBT curriculum: 'Let kids be kids' Follow us on Instagram , Facebook , and Twitter for nonstop inspiration delivered fresh to your feed, every day. |
8 Best Vanguard ETFs for Retirees
Vanguard ETFs are among the lowest-cost options in most categories. Retirement is that time when life becomes simpler. Investing in retirement is no exception. One way to streamline your investment management responsibilities is to choose low-fee index funds from a trusted company. Vanguard, the premier index fund investment firm, offers numerous commission-free exchange-traded funds. In fact, the only funds that aren't commission-free at Vanguard are the leveraged and inverse ETFs. But before choosing a top Vanguard ETF, take a moment and review your investing goals, risk tolerance and asset allocation. Here are seven ETFs to consider for your retirement portfolio. Vanguard Total World Stock ETF (ticker: VT ) For one-stop stock market investing, this fund is spot on. "The Vanguard Total World Stock ETF is a great option for retirees who need equity exposure but don't have enough money or financial knowledge to create a globally diversified stock portfolio themselves," says Daniel Ruedi, a financial advisor in Plano, Texas. Within one fund, you own stocks from these regions: North America, Europe, Pacific, Middle East and emerging markets . With over 8,000 stocks and a low 0.09% expense ratio, VT allows investors to own the top companies in the U.S. and abroad. With a current 2.36% yield, retirees can enjoy cash flow, too. The five- and 10-year returns are 5.45% and 9.54%, respectively. Vanguard Total Stock Market Index Fund ( VTI ) With about $759 billion assets under management, this comprehensive U.S. stock market fund spans the large- to micro-cap universe. Unlike the Vanguard Total World Stock fund, this investment predominantly includes U.S. firms. The fund owns nearly 3,600 stocks from the largest companies like Microsoft Corp. ( MSFT ), Apple ( AAPL ) and Amazon.com ( AMZN ) to small firms such as Dean Foods Co. ( DF ). For investors seeking vast U.S. stock market exposure, the 0.03% management fee is tiny. VTI offers a reasonable 2% yield, better than most savings accounts, along with the opportunity for long-term capital growth. The five- and 10-year returns are 9.25% and 13.98%, respectively. Story continues Vanguard REIT Index ( VNQ ) Real estate offers a diversification bonus to a stock and bond portfolio. REITs invest in stocks issued by real estate investment trusts that own office buildings, hotels, residential realty, retail and other real property. With nearly 190 stocks, VNQ is an easy way to gain access to a broad swath of the real estate market. The low 0.12% expense ratio means that most of your investing dollars are going into the market, not the fund management. The 3.96% yield provides cash flow along with appreciation potential. Expect the high yield to continue as the IRS requires REITs to pay out 90% of their income as dividends. The REITs five- and 10-year returns are 7.58% and 14.92%, respectively. Vanguard Total Bond Market ETF ( BND ) For investors seeking a broadly diversified U.S. bond fund to add to their REIT and stock funds, the Vanguard total bond ETF does the job. Recommended by David John Marotta, president of Marotta Wealth Management, BND is included in his firms' Vanguard index fund 60% stock an 40% bond "gone-fishing" portfolio. Most BND holdings are AAA-rated bonds with additional representation from lower investment grade debt. The higher rated bonds minimize default risk, while the addition of BBB bonds boost the fund's yield. The ultra-low 0.03% expense ratio is among the lowest in the category. BND currently yields 2.78%. The robust 5.44% one-year total return reflects the benefit of both dividend payments and price appreciation. Vanguard Short-Term Treasury Index Fund ETF ( VGSH ) Two experts recommended this ultra-save U.S. Treasury index fund. Kirk Chisholm, a wealth manager at Innovative Advisory Group in Lexington, Massachusetts, reminds investors that we're in the ninth inning of this bull market and that capital preservation is important. "When you are in retirement, the last thing you need is to lose 30% to 50% of your retirement nest egg by trying to squeeze out an extra 2% to 3%. It just isn't worth it," Chisholm says. Steven Jon Kaplan, CEO of True Contrarian Investments, likes the safety of Treasurys, with its added benefit of interest payments exempt from state and local income taxes. The low 0.7% expense ratio is another draw, he says. Vanguard Total World Bond ETF ( BNDW ) The Total World Bond ETF owns investment, fixed-rate U.S. and international debt. This expansive bond fund allocates 47% to North American bonds and the remaining investments span the globe. The fund owns approximately 32% European bonds, 15% from the Pacific regions and more than 2% in other international markets. BNDW offers a 1.89% yield, and should interest rates drop, investors will realize capital appreciation as well. The bond fund enjoys an 0.09% management fee. This year, the 5.83% year-to-date return afforded retirees a generous income stream. For the simplest diversified investing, pair BNDW, with a diversified international stock index fund like VTI for a complete portfolio . Vanguard Emerging Markets Government Bond ETF ( VWOB ) Now that the basic asset classes are covered, investors seeking higher yields might consider VWOB, which invests in U.S. dollar-denominated bonds issued by government and related entities in emerging market countries. The bonds, bought and sold with U.S. dollars, eliminate uncertain currency risk. The top 10 emerging markets represented within the fund are Mexico, Indonesia, Brazil, Saudi Arabia, Russia, United Arab Emirates, Turkey, Qatar and Argentina. The government-backed debt makes this international bond fund somewhat safer than other emerging market debt. The fund's 0.3% expense ratio is significantly lower than the 1.2% peer average. For retirement cash flow, the current 4.5% yield is tough to beat. Vanguard Tax-Exempt Bond ETF ( VTEB ) For retirees in higher tax brackets, a municipal bond ETF offers federal tax-free income. The after-tax returns of VTEB can trump those of a comparable taxable ETF, depending on your tax bracket. The fund is safe from default risk as the majority of bonds are AAA, AA or A rated. True to Vanguard's mission, the VTEB expense ratio is a low 0.08%. Presently, the fund invests in more than 4,000 bonds and yields 2.27% tax free. The year-to-date return is 5.03%. Consider these Vanguard ETFs for your retirement portfolio. -- Vanguard Total World Stock ETF ( VT ) -- Vanguard Total Stock Market Index Fund ( VTI ) -- Vanguard REIT Index ( VNQ ) -- Vanguard Total Bond Market ETF ( BND ) -- Vanguard Short-Term Treasury Index Fund ETF ( VGSH ) -- Vanguard Total World Bond ETF ( BNDW ) -- Vanguard Emerging Markets Government Bond ETF ( VWOB ) -- Vanguard Tax-Exempt Bond ETF ( VTEB ) More From US News & World Report 8 Best Mutual Funds for Retirement 7 Best Bond Funds for Retirement 7 Best Vanguard Funds for Your RetirementPortfolio |
Is It Time To Consider Buying Dime Community Bancshares, Inc. (NASDAQ:DCOM)?
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Dime Community Bancshares, Inc. (NASDAQ:DCOM), operating in the financial services industry based in United States, received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to $20.21 at one point, and dropping to the lows of $17.75. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Dime Community Bancshares's current trading price of $18.22 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Dime Community Bancshares’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Dime Community Bancshares
According to my relative valuation model, the stock seems to be currently fairly priced. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Dime Community Bancshares’s ratio of 13.94x is trading slightly above its industry peers’ ratio of 13.92x, which means if you buy Dime Community Bancshares today, you’d be paying a relatively reasonable price for it. And if you believe Dime Community Bancshares should be trading in this range, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Dime Community Bancshares’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a negative profit growth of -0.6% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Dime Community Bancshares. This certainty tips the risk-return scale towards higher risk.
Are you a shareholder?DCOM seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on DCOM, take a look at whether its fundamentals have changed.
Are you a potential investor?If you’ve been keeping an eye on DCOM for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on DCOM should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Dime Community Bancshares. You can find everything you need to know about Dime Community Bancshares inthe latest infographic research report. If you are no longer interested in Dime Community Bancshares, you can use our free platform to see my list of over50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
UPDATE 1-Palestinians reject economic solutions from 'punitive' U.S.
* Protesters demonstrate in West Bank, Gaza
* Officials say Trump aid reductions create hardship
* Cuts seen as pressure on Palestinians to resume talks
* Trump recognised Jerusalem as Israel capital in 2017
* Some hit at Palestinian leaders for boycotting meeting
* Arabs across region slam governments for participating (Adds broader Arab reaction to Bahrain workshop)
By Rami Ayyub and Nidal al-Mughrabi
RAMALLAH/GAZA, June 26 (Reuters) - Palestinian leaders accused the Trump administration of punishing them with one hand and offering to reward them with the other, as protesters turned out in the West Bank and Gaza on Wednesday to demonstrate against a U.S. economic peace plan.
At a U.S.-led conference in Bahrain U.S. President Donald Trump's son-in-law Jared Kushner urged Palestinian leaders boycotting the event to think outside the "traditional box" and consider the $50 billion plan to boost the Palestinian and neighbouring economies.
The event drew fiery criticism both within the Palestinian territories, where demonstrations broke out for a second day, and across the wider region, where many Arabs took aim at officials for taking part.
Palestinian officials said it was Trump who had inflicted further hardship on Palestinians, cutting hundreds of millions in aid to humanitarian organisations across the Israeli-occupied West Bank and Gaza.
"If the U.S. is so concerned about Palestinian well-being, then why did they carry out these punitive measures against us?," senior Palestine Liberation Organisation official Hanan Ashrawi said in Ramallah.
"Why did they target Palestinian infrastructure? Why did they stop scholarships to Palestinian students?," she asked.
In August last year, Washington announced an end to all U.S. funding for the U.N. agency that assists Palestinian refugees. The U.S. was UNRWA's biggest donor by far up to that point, giving it $364 million in 2017.
And in February, the U.S. Agency for International Development (USAID) ceased all assistance to the Palestinians, to whom it provided $268 million in 2017.
The U.S. cuts were widely seen as a way of putting pressure on the Palestinian leadership to re-engage with the White House, which it has boycotted since Trump recognised Jerusalem as the capital of Israel in 2017.
"The same team that cut 350 million dollars of aid to refugee camps ... (goes) to Manama to say we have a brilliant plan to bring Palestinians a new chance, a new opportunity," Chief Palestinian Negotiator Saeb Erekat said on Tuesday in Jericho.
"Why would Palestinians say no to such (a) plan?," he added, mockingly.
GULF APART
Neither the Israeli nor Palestinian governments are attending the event at Manama's luxury Four Seasons hotel, where international bureaucrats enjoyed cocktails and delicate pastries, mingling with Arab businessmen sporting gold Rolex watches.
Some Gulf Arab states, like Saudi Arabia and the United Arab Emirates, voiced qualified support for Kushner's plan, while Qatar sent top officials but made no public comment. Egypt and Jordan, the only two Arab states with a peace deal with Israel, sent deputy ministers.
Many Arabs slammed their governments for taking part, describing the event as a sell-off of Palestinians' rights without them present.
"The participation of Arab and Islamic countries in this conference of shame in Manama is unfortunate. ..Political courtesy does not justify this participation," Qatar University professor of political sociology Majed al-Ansari said on Twitter.
Bahrain's main opposition group, the outlawed Shi'ite Muslim al-Wefaq party, said hosting the event had brought shame on their country's rulers, while Kuwait's parliament said it would reject anything that comes out of the event.
Washington is hoping that wealthy Gulf Arab states such as Saudi Arabia, the United Arab Emirates, and Qatar will bankroll much of the $50 billion plan, another potential sticking point unpopular with some opposed to the deal.
"The last thing we can imagine as Qatari citizens is for the wealth of our country and nation to contribute to the displacement of another Arab people," Qatari Youth Against Normalisation, a Qatari youth group, said in a statement.
Former Egyptian football star Mohamed Aboutrika took aim at FIFA head Gianni Infantino, who spoke in Manama about developing a sports sector in the Palestinian territories to drive economic growth.
"Thank you to everyone who boycotted this auction...the presence of the head of FIFA is a major question mark...our holy sites are not for sale," Aboutrika wrote on Twitter.
DEMONSTRATIONS
More than 1,500 km (930 miles) away in Gaza, where over half of the enclave's two million people live in poverty, Palestinians criticised the Arab businessmen who attended for siding with the United States and Israel.
"Capitalists do not think of the poor," said Abdel-Rahim Nateel, 62, who spent most of his life in the Beach refugee camp in northern Gaza.
"Let them come and give aid to the hungry people, make projects, ask Israel not to attack us... let them give us our state on the 1967 borders and we do not want anything else from them."
Several thousand Palestinians demonstrated in Gaza on Wednesday, burning posters of Trump and his close ally, Israeli Prime Minister Benjamin Netanyahu. "No to the conference of treason, no to the conference of shame," read one banner.
In the Israeli-occupied West Bank, demonstrations against Bahrain were light for a second day. Some Palestinians voiced a sense of exhaustion about peace efforts and promises of cash and prosperity.
"This conference is just like all others from the past, Arab conferences, American conferences. All of them have been at the Palestinians' expense," said Hamdallah Qasem, 72, who lives in Ramallah.
Their own leadership was not exempt from criticism, however. At an Israeli military checkpoint separating Palestinian villages from the neighbouring Israeli settlement of Givat Zeev, several Palestinian day labourers said President Mahmoud Abbas was hurting the local economy by boycotting the conference.
"If he was struggling like the rest of our people, maybe he would participate. As long as boycotting doesn't hit his wallet, he will never change his position," said Nasser, who declined to give his last name for fear of retribution.
Yara Hawari, a policy analyst based in Ramallah, said the low turnout at protests was due to a sense of fatigue at international initiatives from which they saw little chance of changing their situation.
"There are certain topics that mobilize Palestinians more than others - like Jerusalem. This 'economic peace' is just more of the same. They see it as empty talk," Hawari said. (Reporting by Rami Ayyub in Ramallah and Nidal al-Mughrabi in Gaza, Additional reporting by Lisa Barrington in Dubai, Ahmed Haggagy in Kuwait City, Eric Knecht in Doha, and Ahmed Tolba in Cairo; Editing by Stephen Farrell, William Maclean and Hugh Lawson) |
'The Bachelorette' star Hannah Brown speaks out amid criticism
Hannah Brown is already more than halfway through her season as The Bachelorette , but she’s just now taking a moment to address some harsh criticism she’s faced throughout her journey — including that which takes aim at her faith. The former Miss Alabama has been open about her religious beliefs on camera, most recently in a notable conversation with a contestant who goes by Luke P, as she talks through potential relationships and even pre-marital sex. But during Monday night’s explosive episode, when the 24-year-old revealed, “I have had sex and Jesus still loves me,” Brown felt some heat from viewers at home. In an Instagram post on Wednesday, Brown acknowledged comments made about the recent episode with one strong statement: “I refuse to believe I give Christians a bad name.” View this post on Instagram A post shared by Hannah Brown (@alabamahannah) on Jun 25, 2019 at 10:59pm PDT “I am standing firm in believing that maybe God wants to use a mess like me to point to His goodness and grace. But dang, it’s hard,” she wrote. “The amount of hate I and the men on this journey with me receive… it’s chilling to know so many people want to spread hurt so recklessly.” The bachelorette and former Bachelor contestant went on to acknowledge that “we all fall short of the glory of God… we just happen to do it on national television.” Many of the ABC franchise’s other cast members came to her defense, including the person whose final rose Brown previously competed for, Colton Underwood . “Keep being you. You’re an amazing example to every Christian by being bold and conquering your fears, being honest, and standing up for yourself,” Underwood wrote, while his girlfriend, Cassie Randolph, added, “You’re such a light and an amazing example of a Christian who is bold, humble, and kind. I see it every time I watch you.” One fan also shared that Brown is actually her “favorite person that has ever been on national television” because she’s “honest, real and human.” Story continues Ultimately, Brown said that although she’s flawed, she shouldn’t be judged for it. “I’m an imperfect human. Who is yes, also a Christian,” she wrote. “God has a master plan for all the failures I continue to learn and grow from to work out for good, and for his glory.” Read more from Yahoo Lifestyle: Catholic teens protest high school skirt ban, demand their old uniforms back: 'This is absolutely sexist' Priest faces backlash for asking women to dress modestly at mass: ‘You can’t be serious’ 15-year-old student 'ashamed' and 'disgusted' after being dress coded at school Follow us on Instagram , Facebook and Twitter for nonstop inspiration delivered fresh to your feed, every day. |
Robots ‘will take 20 million manufacturing jobs over the next decade’, report warns
Engineer using tablet check and control automation robot arms machine in intelligent factory industrial on monitoring system software. Welding robotics and digital manufacturing operation. People have long been nervous about robots and artificial intelligence taking over human jobs - but the next decade will see the process shoot into overdrive. During the next decade, machines will displace 20 million manufacturing jobs, a report by analyst firm Oxford Economics suggests. That amounts to 8.5% of the global manufacturing workforce, with each robot displacing 1.6 workers on average. The report says that robotisation is accelerating due to falling costs, with the average unit price of a robot falling 11% between 2011 and 2016, CNN reported. The report suggests that 30 million robots could be working in China by 2030, and the benefits to the world economy will be immense. Read more from Yahoo News UK: Boris Johnson's team forced to deny he only owns one pair of socks Boy, 12, arrested on suspicion of homophobic assault in Liverpool Ian Brady ‘had access to vulnerable teenagers in Wormwood Scrubs’ The firm forecasts that if robot installations rose by 30% above current forecasts by 2030, it would lead to a 5.3% increase in global GDP, or $4.9 trillion. But it could fuel inequality. The report says, ‘This great displacement will not be evenly distributed around the world, or within countries. ‘Our research shows that the negative effects of robotization are disproportionately felt in the lower-income regions compared with higher-income regions of the same country.# Within 15 years, half of all current jobs will be taken over by AI, one expert suggested earlier this year. Kai-Fu Lee author of AI Superpowers: China, Silicon Valley, and the New World Order said, 'People aren't really fully aware of the effect AI will have on their jobs.’ He also suggested that warehouse workers, clerks, telephone operators, fast food workers, dish washers and couriers will be among the first to go. He says that some jobs, such as psychologists and tour guides, which rely on complex human-to-human interactions, will largely be ‘immune’ . 'AI is powerful and adaptable, but it can't do everything that humans do.’ Story continues 'Human to human interaction is safe, providing comfort and satisfaction is safe. ---Watch the latest videos from Yahoo UK--- |
UPDATE 1-Hexagon CEO Rollen found not guilty of insider trading in appeals case
* High-profile Swedish CEO found not guilty of insider trading
* Appeals court verdict affirms 2018 acquittal
* Prosecution to consider whether to appeal (Adds detail of case, reactions from Rollen, prosecution, board, detail)
By Terje Solsvik and Gwladys Fouche
OSLO, June 26 (Reuters) - The chief executive of Swedish industrial technology group Hexagon, Ola Rollen, was found not guilty of insider share trading, an Oslo appeals court said on Wednesday, upholding the verdict of a lower court.
Prosecutors had asked for an 18-month prison term for Rollen over his 2015 purchase of shares in Norway's Next Biometrics , a transaction which did not involve Hexagon.
One of Sweden's best known business leaders, Rollen has always denied any wrongdoing and continued to run Hexagon, which he has led since 2000, transforming it into a $19 billion technology market leader.
"I am yet again relieved by the court’s verdict, confirming what I and my lawyers have stated from the very beginning; that I did nothing wrong," Rollen said in a joint statement with Hexagon.
The case concerned Rollen's purchase of Next shares on behalf of Greenbridge, an investment firm he co-founded.
Prosecutors said this was illegal because Greenbridge was involved in talks to take a bigger stake in Next at a higher price.
Rollen's lawyer argued that his client did not possess privileged information at the time of the share purchase and that the transactions were motivated by his own independent analysis of Next Biometrics.
As CEO of Hexagon, Rollen has helped transform the company from a sprawling conglomerate with a market value of a few billion crowns, through a steady stream of acquisitions and high growth.
The prosecution said in a statement that it would go through the verdict and assess whether it will appeal.
Trading in the shares of Hexagon and Next Biometrics had ended for the day before the verdict was released.
"I speak on behalf of the Board and everyone else who has stood united with Ola since the beginning of this ordeal that we were never in doubt about Ola’s innocence and, consequently, that the Norwegian courts would reach a firm conclusion to dismiss all allegations," Gun Nilsson, chair of the board of Hexagon said in a statement. (Reporting by Terje Solsvik and Gwladys Fouche Editing by Susan Fenton) |
Is It Too Late To Consider Buying PRA Group, Inc. (NASDAQ:PRAA)?
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PRA Group, Inc. (NASDAQ:PRAA), which is in the consumer finance business, and is based in United States, saw significant share price movement during recent months on the NASDAQGS, rising to highs of $29.83 and falling to the lows of $25.93. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether PRA Group's current trading price of $26.95 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at PRA Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for PRA Group
PRA Group appears to be overvalued according to my relative valuation model. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that PRA Group’s ratio of 20.46x is above its peer average of 9.09x, which suggests the stock is overvalued compared to the Consumer Finance industry. But, is there another opportunity to buy low in the future? Since PRA Group’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. PRA Group’s earnings over the next few years are expected to increase by 81%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
Are you a shareholder?PRAA’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe PRAA should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor?If you’ve been keeping tabs on PRAA for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for PRAA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on PRA Group. You can find everything you need to know about PRA Group inthe latest infographic research report. If you are no longer interested in PRA Group, you can use our free platform to see my list of over50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Top Analyst Reports for JPMorgan, Wells Fargo & Duke Energy
Wednesday, June 26, 2019
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including JPMorgan (JPM), Wells Fargo (WFC) and Duke Energy (DUK). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can seeall oftoday’s research reports here >>>
JPMorgan’s shares have gained +8.2% in the past three months, outperforming the Zacks Major Regional Banks industry’s increase of +3.4%. The bank has an impressive earnings surprise history, having surpassed expectations in three of the trailing four quarters.
The Zacks analyst thinks higher rates, improving loan balance, strong balance sheet (indicated by stress test clearance), opening branches in new markets and focus on strengthening credit card business will support the bank's financials. Expanding its reach into lucrative U.S. healthcare payments market with a deal to acquire InstaMed will aid profitability.
However, dismal mortgage banking performance, mainly due to lower origination volume and increase in competition, is expected to continue hampering fee income growth. The company's significant dependence on capital markets revenues makes us wary and is expected to hurt revenue growth to some extent.
(You canread the full research report on JPMorgan here >>>).
Shares ofWells Fargohave underperformed the Zacks Major Regional Banks industry in the past six months, (+1.4% vs. +11.4%). Its earnings surprise history is satisfactory, having beaten the Zacks Consensus Estimate in two of the trailing four quarters.
The Zacks analyst thinks Wells Fargo's restructuring activities and higher interest income, aided by loan growth, remain a tailwind. Further, ongoing investment in the businesses to enhance compliance and risk management capability bodes well. Recently, the company also cleared the Fed’s 2019 stress test.
However, Wells Fargo has been slapped with several sanctions, including a cap on its asset growth by the Fed. This is an outcome of the CFPB's dissatisfaction with the bank’s slow progress on fixing risk-management issues. Rising expenses due to pending litigation issues and hike in personnel costs curb bottom-line expansion.
(You canread the full research report on Wells Fargo here >>>).
Duke Energy’s shares have outperformed the Zacks Electric Power industry in the past year, gaining +13.3% vs +12.4%. The Zacks analyst likes Duke Energy’s strong focus on expanding its scale of operations and implementing modern technologies at the company’s facilities.
Heavy investments are made in infrastructure and expansion projects. The company expects to invest about $37 billion in its overall growth projects during the 2019-2023 period. This investment plan will drive earnings base growth in the company’s combined electric and gas businesses by approximately 6%, over the next five years.
However, massive debt levels can turn out to be a major headwind for the company. Currently, Duke Energy’s strategy includes generation of cleaner energy, due to which it is anticipated to incur environmental compliance cost of $2.78 billion for the 2019-2023 period. Such costs may dampen its bottom-line growth.
(You canread the full research report on Duke Energy here >>>).
Other noteworthy reports we are featuring today include PayPal (PYPL), General Motors (GM) and Norfolk Southern (NSC).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Mark VickerySenior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weeklyEarnings TrendsandEarnings Previewreports. If you want an email notification each time Sheraz publishes a new article, pleaseclick here>>>
New Branches, Loan Growth Aid JPMorgan (JPM), Mortgage a Woe
Loan Growth, Streamlining Support Wells Fargo (WFC)
Renewables Expansion to Aid Duke Energy (DUK), Debt Load Ails
Pick-Up Trucks Drive General Motors (GM) Amid Recall Woes
Per the Zacks analyst, strong sales of 2019 Chevrolet Silverado and GMC Sierra light-duty cabs and their competitive prices are a positive.
Norfolk Southern (NSC) Gains From Cost Cuts Amid Debt Woes
The Zacks analyst likes the improvement in operating ratio as Norfolk Southern aims to check costs. Efforts to reward shareholders are encouraging too.
Dialysis Services Aid DaVita (DVA), Other Business Sluggish
DaVita has consistently gained from strong dialysis services revenues. However, the Zacks analyst is apprehensive about the recent reverses in the company's Other business unit.
Buyouts Boosts A. O. Smith (AOS) Business, High Costs Hurt
Per the Zacks analyst, A. O. Smith stands to gain from synergistic benefits of acquired assets, including Water-Right bought in April 2019.
Grubhub (GRUB) Banks on Growing Partnerships Amid Competition
Per the Zacks analyst, higher active diner base, driven by rising partnerships with Taco Bell and Dunkin Bands, is a tailwind.
TC PipeLines (TCP) to Ride on PNGTS Project Amid Debt Woes
While PNGTS pipeline and brownfield projects like Portland XPress and Westbrook XPress will fuel profits of TC PipeLines, the Zacks analyst is worried about the firm's elevated leverage of 74%.
Patterson (PDCO) Gains from Animal Health Unit, Costs a Woe
Per the Zacks analyst, strong prospects in the core Animal Health unit continue to boost Patterson Companies' overall performance.
Casey's (CASY) Value Creation Plan Likely to Propel Sales
Per the Zacks analyst, Casey's remains on track with its value creation plan to lift sales and profitability. This includes new fleet card program, price optimization, and digital engagement program.
Strong Demand for On-Highway Products Aid Allison (ALSN)
Per the Zacks analyst, strong demand for on-highway products from global customers along with price increase of certain products drive Allison's revenues.
Debt Cuts, Action 2020 Initiatives Aid ArcelorMittal (MT)
The Zacks analyst is impressed with the company's efforts to reduce debt. Moreover, costs reduction and high-value products line expansion under its Action 2020 initiative should boost performance.
PayPal (PYPL) Hurt by Credit Portfolio Sale & Competition
Per the Zacks analyst, the sale of PayPal's U.S. consumer credit receivables portfolio to Synchrony is negatively impacting the top-line growth. Also, rising competition from Square poses a risk.
Tough Competition, Regulations Hurt Anadarko Petroleum (APC)
Per the Zacks analyst, strong competition from major companies, modifications in laws and regulations regarding hydraulic fracturing will hurt Anadarko Petroleum's production and profitability.
Trump's Policy Change on Cuba Travel to Hurt Carnival (CCL)
Per the Zacks analyst, policy change on travel to Cuba will have a negative impact on cruise industry and Carnival is no exception. Voyage disruptions related to Carnival Vista is also a concern.
undefinedundefinedWells Fargo & Company (WFC) : Free Stock Analysis ReportPayPal Holdings, Inc. (PYPL) : Free Stock Analysis ReportNorfolk Southern Corporation (NSC) : Free Stock Analysis ReportJPMorgan Chase & Co. (JPM) : Free Stock Analysis ReportGeneral Motors Company (GM) : Free Stock Analysis ReportDuke Energy Corporation (DUK) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Pinterest Secretly Treats Pro-Life Messages Like Porn
T he country has grown increasingly aware of the power of technology companies to ban user content based on users viewpoints. The latest culprit: Pinterest. The seemingly innocuous picture-sharing website, frequented by a loyal audience who pin their favorite images, appears to have intentionally added my pro-life organization, Live Action, to a pornography block list in an effort to censor our life-affirming images. And now, after Pinterest was informed that the insiders report was forthcoming, Live Actions account was permanently suspended. Later in the day, the brave whistleblower, Eric Cochran, was fired from Pinterest and escorted out of the building. LiveAction.org is the web domain of the leading national nonprofit I lead, with over 3 million followers online and over 500,000 active email members, dedicated to ending abortion and building a culture of life. We do this, in part, by sharing information about prenatal development and the abortion procedure, and encouragement and options for women facing an unplanned pregnancy. Our messages on Pinterest mirror that mission by sharing inspirational messages to expectant mothers, ultrasound images showing the science of prenatal development, and images declaring that women deserve better than Planned Parenthood. Pinterest says its mission is to bring everyone the inspiration to create a life they love. Much inspiration is needed to take on the mission of loving a tiny preborn life you help create. Thats why Live Action is on the platform sharing our pro-life messages of hope and empowerment for mom and child, and sharing the dangers of abortion. The Pinterest whistleblower, Eric Cochran, went to Project Veritas, the guerrilla-journalist group founded by James OKeefe, and explained that the websites on a domain block list cannot be linked in posts made by users. He then shows the product code, Slack messages, and internal documents revealing that LiveAction.org is sitting alongside a list of verified pornography sites. This would prevent users from linking to our site. Unfortunately, this does not appear to be a simple mistake. The Pinterest insider provides documentation of a conversation between employees after a user filed an appeal regarding LiveAction.org. The employees doubled down on keeping LiveAction.org on the pornography list. Story continues Secretly applying the label of pornography to Live Actions content demonstrates a concerted effort to sideline a leading pro-life organization the only way they knew how. Live Action has every right to participate on the platform, and Pinterest should course correct its ways immediately. The abortion corporation Planned Parenthood and its local affiliates use the platform to share their message. Censoring messages from the largest online pro-life organization but allowing messages from the largest abortion corporation shows clear bias. Pinterest getting involved in politics or suppressing speech should be every Pinteresters worst nightmare. The place formerly dedicated to creativity, free expression, and freedom of information would be turned into a political and cultural battleground. The whistleblower at Pinterest also revealed that Pinterest was suppressing and monitoring other pro-life and conservative accounts. According to the insider, David Daleiden/Planned Parenthood was added to a list of conspiracy theories that Pinterest monitors. In 2015, David Daleiden exposed executives and staff at Planned Parenthood bartering over the sale of fetal body parts. His investigative work has been used in congressional testimony and court cases, and Coalfire , one of the countrys most trusted digital forensic analysis companies, released a report in 2015 indicating that the undercover videos recorded by the Center for Medical Progress are authentic and show no evidence of manipulation. In addition, a sensitive terms list for Pinterest reportedly includes terms like Bible verses, which the site does not allow to autocomplete, instead changing the word verses to versus or combining the words into nonsensical terms like versesinspirational. The site also allegedly monitors commentators Ben Shapiro, an Orthodox Jew, and Candace Owens, a female black conservative, for what Pinterest considers white supremacist content. Pinterests behavior adds to a growing pattern of censorship all too familiar to us. Both my and Live Actions accounts have been unable to advertise on Twitter since 2015. After many attempts to contact Twitter, we were finally informed that we would not be permitted to advertise unless we deleted all tweets and any content on our website that included the following: criticism of Planned Parenthood, ultrasound images of preborn children, undercover investigations into abortion facilities, or facts about abortion. In fact, in order to pay to play as others do, Twitter informed us that we would have to scrub our Twitter account and our organizations website of any of the content it deemed offensive. All this while Twitter continued to allow the nations largest abortion corporation, Planned Parenthood, and its executives to spend hundreds of thousands of dollars promoting pro-abortion messages on the platform. Pinterest is now joining the censorship circus of social-media platforms that claim to be politically neutral places for users to post content, but instead privately act like a publisher. Claiming to be a platform allows Pinterest to benefit from legal protections against libel, copyright infringement, and other illegal acts by its users. But privately, it is choosing to exercise editorial judgment to exclude certain viewpoints, acting more like a publisher. If Pinterest continues to suppress pro-life content, it should face the consequence any other publisher would face. Pinterests behavior should alarm everyone, not just those of us in the pro-life movement. When a platform with more than 300 million active monthly users chooses to take sides on issues suppressing certain voices and promoting others that can have a negative impact on our national conversations, our politics, and even our laws. The time is now to demand the best from the companies that claim to allow the free sharing of ideas. More from National Review Unplanned Helps Pro-Lifers Tell the Truth about Abortion In Outrage Campaigns, Its the Internal Mob That Matters Why Shouldnt Facebook Ban Infowars? |
Trump: Senators who opposed me went on to 'greener pastures'
President Trump said on Wednesday he was very happy that some senators who held up Republicans attempt to repeal the Affordable Care Act in 2017 have gone on to greener pastures. Trump made the remarks during an hourlong speech at the Faith and Freedom Coalition in Washington. He has remained bitter about his failed efforts to repeal the Barack Obama-era law and directed most of his anger at the late Sen. John McCain, R-Ariz., who cast the deciding vote on the repeal in July 2017. "We needed 60 votes. And we had 51 votes. And sometimes, you know, we had a little hard time with a couple of them, right? Trump said. Fortunately, they're gone now. They've gone on to greener pastures. Or perhaps far less green pastures.
Theyre gone. Im very happy theyre gone. It was initially unclear if Trump was referring to McCain, who died in 2018 after a battle with brain cancer, or to other Republican senators who held out their vote on the repeal. Speaking to reporters aboard Air Force One, White House deputy press secretary Hogan Gidley insisted Trump was not referring to the late Arizona senator. Theres been some confusion over who the president was talking about this morning, Gidley said. Some people in the media are speculating he was talking about Senator McCain. Thats absolutely ridiculous. He was talking specifically about Senators Corker and Flake. President Trump speaks to the press as he leaves the White House on Wednesday. (Photo: Mandel Ngan/AFP/Getty Images) Sens. Jeff Flake of Arizona and Bob Corker of Tennessee expressed concerns about the skinny repeal option but ultimately voted for it. Flake and Heller did not seek reelection in 2018 and were replaced by Democrats. Republican Sens. Susan Collins of Maine and Lisa Murkowski of Alaska voted against the repeal, but both remain in the Senate. McCain has been the main target of Trumps rage surrounding the failed repeal, and Trump has continued to attack the senator after his death. Earlier in his speech, Trump mentioned McCains no vote without naming the senator. Im keeping Obamacare alive because I felt I should do that, Trump said. We had a chance to terminate it, and a gentleman voted against it after campaigning for many years to repeal and replace. Story continues Trump bragged about his plan to replace the Affordable Care Act, which he said hell pass if Republicans win majorities in the House and Senate in 2020. He hasnt elaborated on what that plan will involve and Republicans havent taken up the issue after the failed repeal in 2017. _____ Read more from Yahoo News: Former top U.S. diplomat deplores policy toward Iran 'untethered to any coherent strategy' Pentagon secretly struck back against Iranian cyberspies targeting U.S. ships Trump admits his Cabinet had 'some clinkers' For Dems, there's no chickening out at Clyburn's fish fry Chore wars: Are men doing enough housework? PHOTOS: Moon rock samples sealed since Apollo missions |
Trump on what he tells Putin: 'It's none of your business'
President Donald Trump said Wednesday his lips are sealed about what he and Russian President Vladimir Putin say to each other behind closed doors. Ahead of his expected meeting with Putin on the sidelines of this weekends G-20 Summit in Osaka, Japan, the president told reporters that while he expected to have a positive conversation with Putin, he would not divulge whether he will press the adversarial leader about election interference. I will have a very good conversation with him, Trump said, adding, What I say to him is none of your business. The meeting between the two leaders will come as the 2020 election heats up, with Democratic hopefuls taking the stage for their first debates on Wednesday and Thursday. Trump has done little to assuage fears that hes not actively working to safeguard next years election from interference, including saying in a recent interview that he would likely accept dirt on an opponent from an foreign adversary, and that he wouldnt necessarily alert the FBI about it. In an interview with Meet the Press host Chuck Todd last week, Trump said he may bring up election interference in his talks with Putin, but quipped that he would be doing it at the request of Todd. The meeting will also follow congressional Democrats demands this week to hear from the White House records chief about allegations Trump sought to conceal documents detailing his past private conversations with Putin, and after Democrats finally secured an agreement from former special counsel Robert Muellers to testify on his Russia probe. On Monday, House Oversight Chairman Elijah Cummings asked acting chief of staff Mick Mulvaney to make the White Houses record keeper available to testify about those documents, a request likely to be rebuffed given the White Houses stonewalling of House Democrats oversight efforts. Trump raised eyebrows last year when, after meeting with Putin privately, he split with U.S. intelligence agencies to argue he had no reason not to believe Putins denials that Russia meddled in the 2016 election to assist him. Democrats efforts to make the White House turn over notes from Trumps discussions with Putin came after a Washington Post report detailing the lengths the president has gone to to conceal details of those private conversations. The White House earlier this year rejected Democrats demands for documents relating to Trumps interactions with Putin. |
Micron Technology Stock Upgraded: What You Need to Know
Every day, Wall Street analysts upgrade some stocks, downgrade others, and "initiate coverage" on a few more. But do these analysts even know what they're talking about? Today, we're taking one high-profile Wall Street pick and putting it under the microscope...
Flash memory makerMicron Technology(NASDAQ: MU) had a much better quarter than many investors feared. Although both revenue and earnings declined, the company's $4.79 billion in sales and $1.05 per share inpro formaprofit easilyexceeded analyst estimates.
And yet, while Micron's earnings beat in fiscal Q3 was nice, arguably even more important was what it had to say about the fiscal fourth quarter currently underway. In fact, it was Micron's guidance that just won the stock an upgrade from hold to buy from Needham & Company.
Our friends atTipRankswere kind enough to provide us a copy of Needham's report, and although only a few lines long, it was chock-full of analytical goodness -- and reasons for investors to be optimistic about Micron stock. (And theyareoptimistic. Already, Micron shares areup 13.5%in afternoon trading.)
For example, there's been a lot of talk about how the Trump administration's trade war with China -- and with Chinese tech company Huawei in particular -- is going to bebad news for chip stocks. Many of the biggest names in America's tech sector supply Huawei with the technology needed to manufacture its cellphones and 5G internet equipment. Bans on the export of such technology to Huawei are expected to do a real number on sales to China.
And yet, despite the wide-ranging export bans, Needham points out, Micron has figured out that it can still "lawfully ship a subset of its products to Huawei while being in compliance with Entity List restrictions." Indeed, the company resumed shipments of a limited number of tech items to Huawei two weeks ago, and the more it continues to ship, the less its revenue stream will be affected by the export bans going forward.
China aside, Needham says that all is still not well in the chip industry. In particular, the analyst notes that there is still "excess DRAM supply" on the market, and "oversupply" of NAND memory as well. Conditions of oversupply tend to spark price wars to capture what demand there is, and this is depressing memory prices -- to the detriment of Micron's sales and profits.
That being said, Needham notes that Micron sees "signs of improvement in bit demand in most DRAM end-markets, esp. cloud, graphics, and PC," and expects "strong growth in DRAM bit shipments in F4Q, with more regular bit growth following in F1Q20." At the same time, there are "signs of increased elasticity" in NAND sales, "leading to NAND bit demand increasing in most" markets.
Both of these developments -- while not indicating that the market has bottomed just yet -- do suggest that an end to price declines could be not too far off.
Meanwhile, Micron stock'svaluationmay havealreadybottomed. Needham notes that shares have historically averaged a price-to-book value of about 2. When Micron last hit a "trough" valuation well below that in November 2012, it was losing money with an operating profit margin of negative 7.5%. At that time, the stock sold for 0.8 times its book value of $7.37 per share.
Conversely, "[i]n Nov. 2014, at the peak of the [last] cycle, [Micron] stock traded at a peak P/B multiple of 3.6x on $10/share of book value and MU generated an operating margin of 23.7%."
Today, Needham notes, Micron stock sells for close to its last "trough" valuation -- one times book value. Yet the company's operating profit margin is closer to itspeaklevel -- 23% -- and its book value is $32 a share.
The flash memory market hasn't yet bottomed, but neither is it anywhere near its peak. When the flash memory cycledoesnext peak, though, it shouldn't be unreasonable to expect Micron stock to sell for a price-to-book valuation of 3.6.
Now, considering that Micron says it's still free-cash-flow positive and is cutting capital spending (which should boost free cash flow even further), it's likely that the book value it has today will remain mostly intact until the peak of the next cycle. And if Micron should sell for 3.6 times book value then (or even anywhere close), it seems reasonable to assume that a valuation of $100 to $115 per share shouldn't be entirely out of the question.
Right now, Needham is only hanging a price target of $50 on Micron shares. If everything works out as planned, however, the stock could eventually go much higher than that.
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Rich Smithhas no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has adisclosure policy. |
Did Changing Sentiment Drive Scholar Rock Holding's (NASDAQ:SRRK) Share Price Down By 19%?
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Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Unfortunately theScholar Rock Holding Corporation(NASDAQ:SRRK) share price slid 19% over twelve months. That's well bellow the market return of 6.6%. We wouldn't rush to judgement on Scholar Rock Holding because we don't have a long term history to look at. Unfortunately the last month hasn't been any better, with the share price down 23%.
See our latest analysis for Scholar Rock Holding
Given that Scholar Rock Holding didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Scholar Rock Holding saw its revenue grow by 64%. That's a strong result which is better than most other loss making companies. The share price drop of 19% over twelve months would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth.Prima facie, revenue growth like that should be a good thing, so it's worth checking whether losses have stabilized. Our brains have evolved to think in linear fashion, so there's value in learning to recognize exponential growth. We are, in some ways, simply the wisest of the monkeys.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
Balance sheet strength is crucual. It might be well worthwhile taking a look at ourfreereport on how its financial position has changed over time.
While Scholar Rock Holding shareholders are down 19% for the year, the market itself is up 6.6%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Notably, the loss over the last year isn't as bad as the 20% drop in the last three months. This probably signals that the business has recently disappointed shareholders - it will take time to win them back. Shareholders might want to examinethis detailed historical graphof past earnings, revenue and cash flow.
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Some Cyclacel Pharmaceuticals (NASDAQ:CYCC) Shareholders Have Copped A 99% Share Price Wipe Out
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We're definitely into long term investing, but some companies are simply bad investments over any time frame. We really hate to see fellow investors lose their hard-earned money. Imagine if you heldCyclacel Pharmaceuticals, Inc.(NASDAQ:CYCC) for half a decade as the share price tanked 99%. And some of the more recent buyers are probably worried, too, with the stock falling 63% in the last year. The falls have accelerated recently, with the share price down 39% in the last three months.
We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
View our latest analysis for Cyclacel Pharmaceuticals
With just US$150,000 worth of revenue in twelve months, we don't think the market considers Cyclacel Pharmaceuticals to have proven its business plan. You have to wonder why venture capitalists aren't funding it. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that Cyclacel Pharmaceuticals has the funding to invent a new product before too long.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Cyclacel Pharmaceuticals has already given some investors a taste of the bitter losses that high risk investing can cause.
Cyclacel Pharmaceuticals had cash in excess of all liabilities of US$14m when it last reported (March 2019). That's not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. We'd venture that shareholders are concerned about the need for more capital, because the share price has dropped 57% per year, over 5 years. The image below shows how Cyclacel Pharmaceuticals's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? It would bother me, that's for sure. It only takes a moment for you tocheck whether we have identified any insider sales recently.
Investors in Cyclacel Pharmaceuticals had a tough year, with a total loss of 63%, against a market gain of about 6.6%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 57% over the last half decade. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Canada teams up with tech giants to counter extremist content online
By Tyler Choi
TORONTO (Reuters) - Canada announced funding and other initiatives on Wednesday to counter violent extremist content online by teaming with major technology companies Twitter, Facebook, Microsoft and Alphabet's Google.
Public Safety Canada said in a statement the government will commit up to C$1 million ($762,428) to the Tech Against Terrorism program to create a digital database that will notify smaller companies when terrorist content is detected and help eliminate it.
The initiatives follow the Christchurch Call to Action, a non-binding agreement formed after the Christchurch shooting in March to "eliminate terrorist and violent extremist content online." Canada joined the Christchurch Call to Action in May.
The second initiative is a youth conference on countering violent extremism online.
Canada previously extended C$1.5 million in funding to Moonshot CVE and C$367,000 to the University of Ontario Institute of Technology to examine right-wing extremism in Canada.
(Reporting by Tyler Choi; Editing by Cynthia Osterman) |
Tiny Air Italy Pushes Back on Big U.S. Carriers That Say It Competes Unfairly
Air Italy,the European airline 49 percent owned by Qatar Airways,continues to push back against accusations by the three major U.S. carriers that it is “cheating” by adding new flights from its Milan hub to several U.S. cities.
“I would love to know how we are cheating,” Rossen Dimitrov, Air Italy’s chief operating officer, said in an interview. “We are a fully European airline, and we meet all the regulations and requirements of the EU. We have a majority shareholder which is European.”
This is the latest in the war of words between the trade group representing American Airlines, Delta Air Lines and United Airlines, and the largest Gulf carriers, Qatar, Emirates, and Etihad Airways. The group, thePartnership for Open & Fair Skies, long has complained about Gulf carriers, arguing they are unfairly subsidized by their governments, leaving the U.S. airlines unable to compete effectively.
Historically, it has two issues. First, it objected to flights the carriers launched from their home hubs to U.S. cities, saying the airlines dumped more capacity than the market could reasonably support. Second, it opposed Gulf carrier flights from Europe to the United States, such as Emirates’ Milan-New York service, which the airlines are permitted to operate under the Open Skies agreements their governments signed with the United States.
Those concerns are less of a problem now than a couple of years ago. The Gulf carriers have been retrenching, and they’re no longer adding U.S routes, whether from their home hubs or from Europe.
More recently, the trade group has found a new enemy — Air Italy. It’s an airline that didn’t exist until last year, when Qatar Airways bought nearly half of a short-haul Italian airline called Meridiana, and renamed it.
The airline has changed its strategy and has been growing quickly since. This summer it is flying from Milan to Los Angeles, San Francisco, Miami, and New York, mostly with airplanes leased from Qatar.
The three major U.S. carriers have questioned Qatar’s motivations, asking the U.S. State Department to look into whether Qatar’s investment is appropriate.
“With respect to Meridana Airlines, it is clear that that airline could not be driving the growth and funding the losses it is clearly having if there wasn’t a strong government entity behind the scenes funding that,” Delta CEO Ed Bastian told reporters earlier this month in Seoul. “The questions are appropriate.”
Secretary of State Mike Pompeohas said he takes the Air Italy threat seriously,but that doesn’t mean the government will take action.
On a legal basis, the larger U.S. carriers likely don’t have much of an argument.
Air Italy is a European-registered airline, and the majority of it is owned by a European shareholders.Just as Delta can own 49 percent of Virgin Atlanticand 10 percent of Air France-KLM, Qatar can own 49 percent of Air Italy.
“What are we doing different than Delta is doing with Virgin and everyone else?” Dimitrov said .”If we call an investment cheating, then we need to redefine the definition of investment.”
Other U.S. interests agree. Earlier this year, the CEOs of FedEx, JetBlue, and Atlas Air wrote to Pompeo,asking him not to take action against Air Italy or Qatar.They noted the Italian Civil Aviation Authority and the European Commission already ruled Air Italy is a European airline, and warned other countries could retaliate if the United States pulls Air Italy’s traffic rights.
“Should the U.S. breach the U.S.-Qatar agreement by restricting Qatar Airways’ rights into the U.S., or the U.S.-EU agreement by restricting Air Italy flights, we can expect to see a rapid unraveling of hard-fought aviation rights around the world when other governments take similar action to shield their state-owned airlines from competition,” they said. “Undoubtedly, closing access to global markets will be a punishment that brings higher prices and fewer choices for American travelers, consumers, and shippers.”
Alaska Airlines did not sign the letter, but it has also tacitly endorsed Air Italy. Earlier this month,it agreed to an interline relationship with Air Italythat will allow customers from both airlines to connect to the other’s flights. The relationship could boost Air Italy’s revenues in San Francisco and Los Angeles, as it will now have access to new customers.
In the future, Dimitrov said, it is possible the two carriers might form a closer codeshare relationship.
The major U.S. airlines may never persuade regulators to shut down Air Italy, but they can pressure it in other ways.
Most obvious is price. Savvy travelers may have noticed an unusual number of fare sales to Milan recently, such as the$582 price offered by United Airlines from Los Angeles for fall travel.A global airline like United can afford to sell prices so cheaply to put pressure on a competitor.
There are other levers, too. To make a route work, airlines generally need connecting passengers, so the Miami flight could pull passengers not just from South Florida, but from the entire Southeast. But with the exception of Alaska, which does not fly to Miami, Air Italy does not have much feed in the United States
Dimitrov said Air Italy has reached out to the three major carriers about an interline relationship. It is not unprecedented for an airline to have such a relationship with a fierce competitor. But in this case, not surprisingly, none has agreed.
“I would love to have a long term relationship with any of them, or all of them,” he said.
There is also the matter of reliability and meeting customer expectations. In an odd move, Air Italy announced a new Chicago route late last year, and began selling tickets for it,only to cancel it a couple of months later.Instead of starting it in spring 2019, the airline said, it will begin in 2020. Dimitrov blamed it on an “aircraft delivery issue.”
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An Intrinsic Calculation For Storm Resources Ltd. (TSE:SRX) Suggests It's 30% Undervalued
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Does the June share price for Storm Resources Ltd. (TSE:SRX) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to today's value. I will be using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
Check out our latest analysis for Storm Resources
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF (CA$, Millions)", "2019": "CA$-42.75", "2020": "CA$18.00", "2021": "CA$20.81", "2022": "CA$23.20", "2023": "CA$25.20", "2024": "CA$26.87", "2025": "CA$28.28", "2026": "CA$29.48", "2027": "CA$30.52", "2028": "CA$31.46"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x4", "2020": "Analyst x1", "2021": "Est @ 15.6%", "2022": "Est @ 11.5%", "2023": "Est @ 8.63%", "2024": "Est @ 6.63%", "2025": "Est @ 5.22%", "2026": "Est @ 4.24%", "2027": "Est @ 3.55%", "2028": "Est @ 3.07%"}, {"": "Present Value (CA$, Millions) Discounted @ 8.74%", "2019": "CA$-39.31", "2020": "CA$15.22", "2021": "CA$16.18", "2022": "CA$16.59", "2023": "CA$16.58", "2024": "CA$16.25", "2025": "CA$15.73", "2026": "CA$15.08", "2027": "CA$14.36", "2028": "CA$13.61"}]
Present Value of 10-year Cash Flow (PVCF)= CA$100.29m
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 1.9%. We discount the terminal cash flows to today's value at a cost of equity of 8.7%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = CA$31m × (1 + 1.9%) ÷ (8.7% – 1.9%) = CA$472m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CA$CA$472m ÷ ( 1 + 8.7%)10= CA$204.20m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is CA$304.49m. To get the intrinsic value per share, we divide this by the total number of shares outstanding.This results in an intrinsic value estimate of CA$2.5. Compared to the current share price of CA$1.76, the company appears a touch undervalued at a 30% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Storm Resources as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.7%, which is based on a levered beta of 1.14. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Although the valuation of a company is important, it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Storm Resources, There are three relevant aspects you should further research:
1. Financial Health: Does SRX have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does SRX's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of SRX? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the TSE every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Seoul: US, N. Korea in talks to set up 3rd Trump-Kim summit
SEOUL, South Korea (AP) — North Korean and U.S. officials are holding "behind-the-scenes talks" to arrange a third summit between President Donald Trump and North Korean leader Kim Jong Un on the fate of the North's expanding nuclear arsenal, South Korea's president said, four months after a second meeting between the leaders in Vietnam collapsed without any agreement. There have been no public meetings between Washington and Pyongyang since the breakdown of the Vietnam summit. But the prospects for a resumption of U.S.-North Korea diplomacy have brightened since Trump and Kim recently exchanged personal letters. Trump called Kim's letter "beautiful" while Kim described Trump's as "excellent," though the contents of their letters have not been disclosed. Trump was asked Wednesday as he departed for Asia if he would be meeting with Kim at the Group of 20 summit in Japan. Trump said he wouldn't be meeting with Kim, but then added: "I may be speaking with him in a different forum. I will be going, as you know, to South Korea after the summit." He didn't elaborate. In a response Tuesday to questions by The Associated Press and six other news agencies, South Korean President Moon Jae-in said that Trump's and Kim's "willingness to engage in dialogue has never faded" and that their recent letter exchanges prove that. Moon, a liberal who met Kim three times last year, has made dialogue with the North as a means to forging peace on the Korean Peninsula a centerpiece of his presidency. He has played a central role in facilitating U.S.-North Korean negotiations, even if those efforts have at times been overshadowed by the Trump-Kim talks that he helped broker. Moon said he doesn't see the Vietnam summit as a failure. He said he thinks the meeting served as a chance for both Washington and Pyongyang to better understand each other's positions and "put everything they want on the negotiating table." Story continues "The success of denuclearization and the peace process on the Korean Peninsula cannot be determined by a summit or two," Moon said, adding that the discussions in Vietnam will form the basis for future talks. "Both sides clearly understand the necessity for dialogue," he added. Despite the deadlocked nuclear negotiations, both Trump and Kim have described their personal relationship as good. When asked whether Kim's recent letter included a mention about another summit, Trump said, "Maybe there was." "But we, you know, at some point, we'll do that," Trump told reporters at the White House on Tuesday. "Getting along very well. He's not doing nuclear testing," he said. In yet another reminder of North Korea's continued mistrust of the United States, its foreign ministry said earlier Wednesday it won't surrender to U.S.-led sanctions and accused Washington of trying to "bring us to our knees." Kim has said North Korea will seek a "new way" if the United States persists with sanctions and pressure. Following his setback in Vietnam, Kim traveled to the Russian Far East in April for his first summit with Russian President Vladimir Putin. Kim also hosted Chinese President Xi Jinping in Pyongyang last week for their fifth summit since March last year, and experts say the North's outreach to its traditional allies is aimed at strengthening its leverage with the Trump administration. Moon said he views the North's expanding diplomacy with Beijing and Moscow as a positive development in efforts to resolve the nuclear standoff. "China and Russia have continued to play constructive roles so far to peacefully resolve the Korean Peninsula issue," he said. "I hope that China and Russia will play specific parts in helping the North resume dialogue at an early stage." Moon didn't elaborate whether U.S and North Korean officials had face-to-face meetings and if so where they took place. He also didn't clarify who were interlocutors or how close they were in setting up a third Kim-Trump summit. Trump's top envoy on North Korea, Stephen Biegun, is to visit South Korea on Thursday, and some experts said he may use his trip as a chance to meet North Korean officials at a Korean border village. Secretary of State Mike Pompeo said Sunday the U.S. was prepared to resume talks with North Korea "at a moment's notice" if the North signaled it wanted discussions about denuclearization. Despite a possible restart of negotiations, it's still unclear whether Washington and Pyongyang can eventually achieve agreements that can satisfy both sides. The Vietnam summit fell apart after Trump rejected Kim's calls for major sanctions relief in return for dismantling his main nuclear complex, something that U.S. officials see as a partial denuclearization step. Kim has since fired missiles and other weapons into the sea and asked Trump to work out mutually acceptable agreements by the end of this December. U.S. officials maintain sanctions on North Korea would remain in place until North Korea takes significant steps toward nuclear disarmament. North Korea has long bristled at the significant U.S. military presence in South Korea, and wants assurances it will not be targeted by the U.S. and South Korea. It sees its pursuit of nuclear weapons and ballistic missiles as an insurance policy against military action. In his written replies, Moon said he has found Kim to be a "flexible yet resolute person" during their talks. He said he believes that Kim's "unequivocal resolve is to move from the past to the future" by pursuing economic growth over building up a nuclear arsenal. The South Korean leader repeated that Kim has never linked denuclearization with South Korea's military alliance with the U.S. or a pullout of American troops when they met. Separately from the unofficial Washington-Pyongyang talks, Moon said the two Koreas have also been holding dialogue via unspecified "diverse channels" and repeated that he's ready to meet Kim again at any place and time. "It depends on Chairman Kim Jong Un," Moon wrote. "I am prepared to meet with Chairman Kim in person at any given moment without being restrained by time, place or formalities." Last year saw a flurry of inter-Korean exchanges and cooperation programs between the Koreas, which have been split along the world's most heavily fortified border since the end of the 1950-53 Korean War. But North Korea has significantly reduced its dialogue and engagement with South Korea since the end of the Vietnam summit. South Korea is now solely proceeding with a search of Korean War dead at the border, which it was supposed to jointly conduct with North Korea. North Korea has also ignored South Korean proposals for joint efforts to stem the spread of highly contagious African swine fever following an outbreak in the North. Moon, who has stressed that South Korea should be in the "driver's seat" in international efforts to deal with North Korea, reiterated his view that the resumption of inter-Korean economic projects currently held back by the U.N. sanctions would help induce further denuclearization steps from the North. Following the Vietnam summit, Moon had said Seoul would "consult" with Washington on resuming operations at an inter-Korean factory park in the North Korean border city of Kaesong and restarting South Korean tours to the North's scenic Diamond Mountain resort. While acknowledging that the resumption of such joint inter-Korean projects would depend on a substantive progress in U.S.-North Korea talks, Moon said improved economic relations between the Koreas would be "conductive" to the larger nuclear negotiations. "History has shown that North Korean nuclear threats diminish when inter-Korean relations are good," Moon wrote. He said that the dismantling of the Yongbyon nuclear complex, which Kim offered in Vietnam, could mean that the North's denuclearization process has entered "an irreversible stage" if it's completely demolished and verified. He said "substantive process" in U.S.-North Korea diplomacy could also help the international community seek a partial or gradual easing of the U.N. sanctions. Yongbyon has facilities to produce both plutonium and highly enriched uranium, two key nuclear ingredients. North Korea has called the complex "the heart" of its nuclear program, while many outside experts say it's an aging facility and that North Korea is believed to have additional multiple secret uranium enrichment facilities. Moon repeated earlier claims that Kim has genuine willingness to trade his nuclear weapons for economic and security benefits, but that it would be important to create an environment where the North could focus on taking relevant steps toward disarmament. "Chairman Kim should be helped along the path toward that goal in a way that sustains his commitment to nuclear dismantlement," Moon wrote. "I think creating a security environment where Chairman Kim can decisively act on nuclear dismantlement without worries is the fastest way to achieve denuclearization diplomatically," Moon added, without specifying the security concessions Washington and Seoul could make. ___ Associated Press writer Nancy Benac contributed to this report. |
Mystery of sudden methane plume detected by NASA Mars rover
The Curiosity rover detected a sudden rise in methane (Getty) A spike of methane on Mars has fuelled discussions that it could be caused by alien life on the Red Planet - after NASAs Curiosity rover detected the highest levels of the gas yet. This week, the methane levels have dropped once again, down to background levels, and NASA has described the event as a transient methane plume. Last week's measurement is the highest concentration the mission has recorded since landing on the planet in August 2012. This change matches up with previous highs and lows picked up by Curiosity's Sample Analysis at Mars (SAM), an instrument tasked with analysing gases, although l' We did make the run again, the data just came back and in fact the methane plume went away, said Paul Mahaffy, principal investigator for SAM. Read more from Yahoo News UK: Boris Johnson's team forced to deny he only owns one pair of socks Boy, 12, arrested on suspicion of homophobic assault in Liverpool Ian Brady had access to vulnerable teenagers in Wormwood Scrubs Curiosity is not fitted with equipment to figure out the source of the methane, making it impossible to tell whether it is biological or geological. Methane is destroyed by solar radiation within several hundred years when it enters the atmosphere, so it must have been released quite recently. Despite this, there remains the possibility that the gas could have been trapped underground for millions or billions of years, and only just been released. 'The methane mystery continues,' said Ashwin Vasavada, Curiosity's project scientist at Nasa's Jet Propulsion Laboratory. 'We're more motivated than ever to keep measuring and put our brains together to figure out how methane behaves in the Martian atmosphere.' ---Watch the latest videos from Yahoo UK--- |
California, Canada sidestep Trump, ink deal on emissions
DETROIT (AP) — California picked up an important partner its long-running dispute with the Trump administration over vehicle emissions and fuel economy by announcing a deal with Canada to work on pollution reductions.
The agreement comes as the state is in a standoff with its own federal government on the same issues, with little hope of resolving the dispute outside of court.
Few details were offered under the deal announced Wednesday, but it's clear that Canada would be amenable to stricter regulations that now match those in California and 13 other states, setting up a conflict with the Trump administration's plans to relax the standards. Canada is in the midst of reviewing its requirements.
Two agencies in the Trump administration are reviewing Obama-era standards and have proposed freezing fuel economy and emissions requirements at 2021 levels. California and the other states likely would reject such a move and go with stronger standards. The administration has threatened to challenge California's legal right to set its own requirements, granted in 1970 as a way to combat oppressive smog.
Although members of both parties in Congress and the auto industry have urged negotiations to get one requirement nationwide, no talks are scheduled.
"It's not looking very good at the moment," Mary Nichols, chairwoman of California's Air Resources Board, said on a conference call Wednesday.
Two Trump administration agencies, the Environmental Protection Agency and the National Highway Traffic Safety Administration, seem to have rejected the idea of negotiating, Nichols said. "We remain hopeful as long as there's any opportunity to avert what will otherwise be years of litigation and some degree of confusion," Nichols said.
Messages were left Wednesday seeking comment from the EPA and the traffic safety agency, both of which have powers to set fuel economy and pollution regulations.
Canadian Environment Minister Catherine McKenna stopped short of saying the country would join California with stricter standards, but said the country is "very interested in options that deliver cleaner cars by making cuts to carbon pollution." Fuel economy and pollution standards often vary between countries, but the U.S. and Canada have matched in recent years.
At issue is a Trump administration plan to roll back the Obama EPA requirements, which would require cars to get 36 miles (58 kilometers) of real-world driving per gallon (3.8 liters) of gas by 2025. The goal is for Americans to fill up their gas tanks less frequently, sending fewer climate-changing emissions and pollutants into the air, one of the most aggressive measures in place to deal with the impact of climate change.
Instead, the administration has proposed halting the tougher standards at a 2020 requirement that cars achieve 30 miles (48 kilometers) per gallon of real-word driving. Under the Obama rules, California and the federal government were on the same page.
It's the second effort by the Trump administration to annul initiatives adopted under Obama to rein in fossil fuel emissions. The administration on Wednesday eased restrictions on coal-fired power plants.
Under the deal between California and Canada, the governments will work together on regulations to cut greenhouse gas emissions from light-duty vehicles and to accelerate use of zero-emission vehicles such as electric cars. They'll also share information on low-carbon fuel requirements, which Canada is developing.
Other states may sign on to California's stricter standards, Gov. Gavin Newsom said without giving details.
Nichols said California and Canada weren't sending a message to the Trump administration with the agreement, which came just a week after a congressional committee held a hearing on the matter. She said the agreement has been in the works for a long time. |
Is Storm Resources Ltd. (TSE:SRX) Trading At A 30% Discount?
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Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Storm Resources Ltd. (TSE:SRX) as an investment opportunity by taking the expected future cash flows and discounting them to today's value. I will use the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
Check out our latest analysis for Storm Resources
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF (CA$, Millions)", "2019": "CA$-42.75", "2020": "CA$18.00", "2021": "CA$20.81", "2022": "CA$23.20", "2023": "CA$25.20", "2024": "CA$26.87", "2025": "CA$28.28", "2026": "CA$29.48", "2027": "CA$30.52", "2028": "CA$31.46"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x4", "2020": "Analyst x1", "2021": "Est @ 15.6%", "2022": "Est @ 11.5%", "2023": "Est @ 8.63%", "2024": "Est @ 6.63%", "2025": "Est @ 5.22%", "2026": "Est @ 4.24%", "2027": "Est @ 3.55%", "2028": "Est @ 3.07%"}, {"": "Present Value (CA$, Millions) Discounted @ 8.74%", "2019": "CA$-39.31", "2020": "CA$15.22", "2021": "CA$16.18", "2022": "CA$16.59", "2023": "CA$16.58", "2024": "CA$16.25", "2025": "CA$15.73", "2026": "CA$15.08", "2027": "CA$14.36", "2028": "CA$13.61"}]
Present Value of 10-year Cash Flow (PVCF)= CA$100.29m
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (1.9%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.7%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = CA$31m × (1 + 1.9%) ÷ (8.7% – 1.9%) = CA$472m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CA$CA$472m ÷ ( 1 + 8.7%)10= CA$204.20m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is CA$304.49m. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of CA$2.5. Compared to the current share price of CA$1.76, the company appears a touch undervalued at a 30% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Storm Resources as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.7%, which is based on a levered beta of 1.14. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Whilst important, DCF calculation shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Storm Resources, There are three important factors you should look at:
1. Financial Health: Does SRX have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does SRX's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of SRX? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every CA stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Investors Who Bought Camping World Holdings (NYSE:CWH) Shares A Year Ago Are Now Down 52%
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Even the best stock pickers will make plenty of bad investments. And unfortunately forCamping World Holdings, Inc.(NYSE:CWH) shareholders, the stock is a lot lower today than it was a year ago. In that relatively short period, the share price has plunged 52%. Because Camping World Holdings hasn't been listed for many years, the market is still learning about how the business performs. Furthermore, it's down 21% in about a quarter. That's not much fun for holders.
See our latest analysis for Camping World Holdings
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the last year Camping World Holdings saw its earnings per share drop below zero. While this may prove temporary, we'd consider it a negative, so it doesn't surprise us that the stock price is down. We hope for shareholders' sake that the company becomes profitable again soon.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Before buying or selling a stock, we always recommend a close examination ofhistoric growth trends, available here..
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Camping World Holdings's TSR for the last year was -50%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted thetotalshareholder return.
While Camping World Holdings shareholders are down 50% for the year (even including dividends), the market itself is up 6.6%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline has continued throughout the most recent three months, down 21%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It is all well and good that insiders have been buying shares, but we suggest youcheck here to see what price insiders were buying at.
There are plenty of other companies that have insiders buying up shares. You probably donotwant to miss thisfreelist of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Saturn’s icy moon Enceladus ‘has all the ingredients for alien life,’ scientists say
NASA's Cassini spacecraft is shown diving through the plume of Saturn's moon Enceladus, in 2015 Geyser-like plumes of ice which erupt from the surface of Saturn’s moon Enceladus have offered a new hint that life could lurk in the moon’s subsurface ocean. NASA’s Cassini probe sampled a plume of material erupting from Enceladus’s surface - but new analysis of the material suggests an environment where life could flourish inside hte moon. Researchers led by Lucas Fifer of the University of Washington found that the plumes are chemically different from the ocean beneath - changed by their 800mph eruption into space. It means that the surface of the moon could be much more hospitable to life than previously believed. Saturn's ocean-bearing moon Enceladus Fifer said, ‘Those high levels of carbon dioxide also imply a lower and more Earthlike pH level in the ocean of Enceladus than previous studies have shown. This bodes well for possible life. ‘Although there are exceptions, most life on Earth functions best living in or consuming water with near-neutral pH, so similar conditions on Enceladus could be encouraging.” Read more from Yahoo News UK: Boris Johnson's team forced to deny he only owns one pair of socks Boy, 12, arrested on suspicion of homophobic assault in Liverpool Ian Brady ‘had access to vulnerable teenagers in Wormwood Scrubs’ ‘And they make it much easier to compare this strange ocean world to an environment that is more familiar.’ Fifer and his team believe that the moon’s high concentration of ammonium could also offer fuel for life. Fifer said, ‘Though the high concentrations of gases might indicate a lack of living organisms to consume it all that does not necessarily mean Enceladus is devoid of life. It might mean microbes just aren’t abundant enough to consume all the available chemical energy.’ ---Watch the latest videos from Yahoo UK--- |
Worried About Recession? Here are 3 Ways Investors Can Decrease Stock Market Risk
How much can you handle?
Determininghowyou invest should always begin with an assessment of your risk profile. That’s typically a combination of your time horizon and willingness, ability, and need to take risk in your portfolio. Ability and need require some planning around your goals, current financial circumstances, age, income, family situation and such but these are reasonably easy to figure out.
The hardest part in this equation is determining your willingness to take risk because risk perception is constantly changing with the markets. When markets are doing well, you’ll feel like you have taken on more risk and when markets are doing poorly, you’ll feel like you should have taken on less risk. And the main determinant of these feelings in almost any investment portfolio will be the stock market since stocks can swing wildly from optimism to pessimism, from booms to busts, and from high levels to low levels.
Therefore, how much money you’re willing to allocate to stocks will have an outsized impact on the volatility of your portfolio. During the Great Financial Crisis, many people realized they couldn’t stomach a market crash, nor the enormous daily swings in volatility cause by owning a portfolio full of equities.
Risk and reward are attached at the hip when it comes to investing but there are ways to curb the volatility of the stock market through intelligent portfolio design, prudent saving habits, and a long-term mindset about the markets.
Following the stock market crash of 2008, investors dove headfirst into complex hedging strategies such as black swan funds that shine during a market crash or bear market funds that rise when stocks fall. It’s possible you could find success through hedging strategies but they’re often expensive, hard to understand, and difficult to hold for the long-term. The simplest way to lower the volatility of your portfolio is to take less risk by owning more fixed income securities such as bonds.
For example, the S&P 500 was down 56% during the crisis from 2007-2009. A 50/50 portfolio of the S&P 500 and high-quality bonds was down more like 24% in this time. But over the past 10 years the S&P 500 is up roughly 300% while the 50/50 portfolio is up more close to 150%. So taking on less risk lowers your expected downside volatility but also your expected returns. These are the trade-offs.
Taking on less risk can also be accomplished by increasing your savings rate. All else equal, someone who is saving more gives themselves a margin of safety to take less risk in their portfolio so they’re not so reliant on the whims of the markets to build their capital base.
One of the worst parts about investing in emerging markets is the fact that they have bone-crushing volatility. Since 1988, emerging markets and U.S. stocks have similar returns but drastically different volatility:
The performance may be similar, but the volatility is nearly double in the developing regions of the world. Since 1994 alone, the MSCI Emerging Markets Index has been through 25 double-digit pullbacks while the S&P 500 has seen just 12. This may be too much volatility for some investors to handle but things don’t look nearly as bad when we combine the two using a mix of 75% in the S&P 500 and 25% in the MSCI EM:
By combining two assets that perform differently over the short run, you can see there was a slightly higher return than either of these markets achieved on its own. It is worth pointing out, an investor would have to rebalance into the pain by periodically buying a little of the asset that is lagging and selling a little of the asset that is outperforming to make this relationship work in practice.
If you had bought an S&P 500 index fund the Friday before Lehman Brothers went bankrupt in September 2008, you would be up more than 190% on your money. That’s not bad considering we were entering the eye of the storm for the financial crisis but you would have had to live through a 45% loss over the ensuing 6 months to earn those returns.
Extending your time horizon is one of the best edges an investor can get these days. As you’ll see in the table below, the odds that you’ll have a positive return by investing in the S&P 500 rises to 100% based on historical performance if your time horizon is 20 years. But the shorter your widow, the higher odds you’ll end up with negative performance.
On a daily basis, it’s basically a crap shoot between gains and losses in the stock market. But extending your time horizon can improve your results, assuming you have the requisite intestinal fortitude to hang on or not check your results on a regular basis.
The benefits of not looking at your results very often is also backed by behavioral finance. Loss aversion is the idea that we regret losses twice as much as gains make us feel good. Looking at the stock market on a daily basis means you’ll basically feel terrible every single day, since the pain from loss will outweigh the joy from gains.
By not actively checking your portfolio results you decrease the impact of loss aversion and give yourself a higher probability of sticking with your stocks over a longer time horizon.
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Your American Car Is Probably Not as American as You Think
Want to buy American when it comes to your next ride?
The latest version of Cars.com’sannual listof the most “American” cars assembled in the U.S. came out on Tuesday. But you may be surprised how little it takes to be considered really American: just 55% of the total value of the car parts is enough to qualify. And, because the data comes from reports mandated by the American Automobile Labeling Act of 1992, there’s additional hidden confusion. The legislation lumps together parts and content from the U.S. and Canada, so the strictly U.S. portion could be less.
“Automakers build plenty of vehicles here, but a lot of cars here are less American than you think,” said Cars.com senior consumer affairs editor Kelsey Mays. For example, the iconicFordF-150? It’s 56% American content, according to the study. “GM SUVs are built near Dallas with US engines and transmissions, but only 41%,” and so aren’t even on the list.
More “American,” in terms of total dollar value of their parts, are the numbers 1, 2, and 3 on the list: the Jeep Cherokee, made by Italy-based Fiat Chrysler, and the Honda Odyssey and Ridgeline, all three of which come in at 70%. Note, though, that the dollar value focus can mean some very expensive parts, like the computers that run engines these days, can tip the balance while significant numbers of components come from elsewhere.
“Certain engines in the F-150 have countries of origin of Mexico and Canada,” Mays said. “The United Kingdom is the country of origin for the diesel [model’s engine].”
Fortune asked bothGMand Ford for comment. GM replied that it had four of the top 15 vehicles for U.S. content and “has announced investments of more than $23 billion in its U.S. manufacturing operations in the last decade, across 11 states.” A Ford spokesperson pointed to theKogod 2018 Made in America Auto Index, from the Kogod School of Business at American University. In that index, F-150 models held the third position with an estimated 65% U.S. and Canadian made. But the index uses a much broader concept than Cars.com, with seven criteria that include profit margins, R&D spending, and inventory and capital use in the U.S.
Trying to understand where cars are built is difficult because of the global nature of auto manufacturing. “Sourcing and parts is a complex business for vehicles,” said Jessica Caldwell, executive director of industry analysis for automobile information publisher Edmunds. “Foreign vehicles can be made here and American cars can be built in Mexico. Car parts come from a wide variety of sources.”
Even in 2006 when Cars.com first began the American-made study, the top ranked vehicles would have between 85% and 90% U.S. content. That’s dropped significantly over the years. Caldwell points to industry changes. Manufacturers are pushing toward electric and autonomous vehicle development but have to fund the work out of their revenue streams while new car sales have been falling in the U.S.
“Last year, there were about 17.3 million new vehicles sold in the U.S.,” she said. This year, estimates are 16.9 million. “Rising costs particularly with interest rates have made [new car purchases] too expensive for consumers,” Caldwell said. Many people have turned to used cars that have longer lifespans at relative bargain prices. “The average transaction price for a new vehicle in May was just about $37,000.” All the tech like Bluetooth and backup cameras helps jack up the cost.
Still, people in the U.S. care about buying American, according to the Cars.com survey. About 66% of all shoppers “want to buy a car that substantially impacts the US economy,” said Mays. Younger people are a little insistent but not much, as 61.3% of those from 18 to 34 wanting the same.
You can see for yourself when car shopping: The percentage of U.S. or Canadian content will either be directly on the sales sticker or on a secondary one by it.
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Here's Why I Think Chevron (NYSE:CVX) Is An Interesting Stock
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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. But as Peter Lynch said inOne Up On Wall Street, 'Long shots almost never pay off.'
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inChevron(NYSE:CVX). While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
See our latest analysis for Chevron
In the last three years Chevron's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. Like a wedge-tailed eagle on the wind, Chevron's EPS soared from US$5.38 to US$7.30, in just one year. That's a impressive gain of 36%.
I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). Chevron shareholders can take confidence from the fact that EBIT margins are up from 4.2% to 9.1%, and revenue is growing. Ticking those two boxes is a good sign of growth, in my book.
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
In investing, as in life, the future matters more than the past. So why not check out thisfreeinteractive visualization of Chevron'sforecastprofits?
Since Chevron has a market capitalization of US$236b, we wouldn't expect insiders to hold a large percentage of shares. But we do take comfort from the fact that they are investors in the company. To be specific, they have US$46m worth of shares. That's a lot of money, and no small incentive to work hard. Even though that's only about 0.02% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.
You can't deny that Chevron has grown its earnings per share at a very impressive rate. That's attractive. I think that EPS growth is something to boast of, and it doesn't surprise me that insiders are holding on to a considerable chunk of shares. Fast growth and confident insiders should be enough to warrant further research. So the answer is that I do think this is a good stock to follow along with. Now, you could try to make up your mind on Chevron by focusing on just these factors,oryou couldalsoconsider how its price-to-earnings ratio compares to other companies in its industry.
Of course, you can do well (sometimes) buying stocks thatare notgrowing earnings anddo nothave insiders buying shares. But as a growth investor I always like to check out companies thatdohave those features. You can accessa free list of them here.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
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